Kookmin, H&CB conclude negotiations on formal merger contract

Kookmin Bank and Housing & Commercial Bank (H&CB) concluded negotiations Wednesday on a formal merger contract between the two banks.

Choi Bum-Soo, head of the Kookmin-H&CB merger committee said that Kim Sang-Hoon, president of Kookmin Bank, and Kim Jung-Tae, president of H&CB, reached agreement Wednesday afternoon on the merger ratio and name of the merged bank.

Under the formal contract agreed by the two parties, the two banks will be absorbed into a newly established corporation. The merger ratio is 1:1.6883. They agreed to use Kookmin Bank as the merged bank`s name.

``They failed to agree on who will be president of the merged bank,`` Choi said. ``He will be selected through a nomination committee that will be created later. And the merger process will delayed from the original schedule and will happen on Oct. 13.``

H&CB is listed on the New York Stock Exchange (NYSE), so the two banks are required to submit a financial report based on U.S. accounting criteria and obtain approval from the Securities and Exchange Commission (SEC) by the end of September for formal listing on the NYSE.

Choi, Kim You-Hwan, managing director of Kookmin Bank, and Kim Young-Il, vice president of H&CB, participated in the day`s negotiations. The two banks are expected to hold a board meeting to get formal approval for the merger contract.

Lee Na-Yeon larosa@donga.com