Our Terms & Conditions | Our Privacy Policy
Bajaj Finserv has signed share purchase agreements (SPAs) with Allianz SE to acquire the German insurer’s 26% stake in their two joint ventures — Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC) — for a total consideration of Rs 24,180 crore.
The transaction marks the end of a partnership spanning over two decades between the Bajaj Group and Allianz.
“The agreed consideration for a 26% stake in BAGIC and BALIC is Rs 13,780 crore and Rs 10,400 crore respectively,” Bajaj Finserv said in a regulatory filing on Monday.
The two companies had entered into a JV in 2001, with Allianz holding a 26% stake — the maximum allowed to foreign investors at that time. Although India later raised the FDI cap in the insurance sector to 74%, tensions had emerged between the partners in recent years, with Allianz keen to raise its stake, while Bajaj was unwilling to dilute its control.
In October, Bajaj Finserv hinted that Allianz had expressed its intent to exit the JVs in both life and general insurance.
“The execution of the SPAs marks the culmination of constructive and amicable discussions to ensure a seamless transfer of the stake of Allianz,” Bajaj Finserv said.
With the acquisition of Allianz’s stake, Bajaj Group’s holding in both BAGIC and BALIC will rise to 100% from the current 74%.
Bajaj Finserv added that the 24-year-old JV agreements with Allianz SE will terminate upon the completion of the first tranche of the acquisition — comprising at least 6.1% — and once Allianz is reclassified from ‘promoter’ to ‘investor’.
“Together with Allianz, we have built two of the strongest insurance companies in India with a combined premium exceeding `40,000 crore, while maintaining industry-best solvency margins,” said Sanjiv Bajaj, chairman and managing director, Bajaj Finserv.
“Given the advantage of a single ownership in both companies, we are confident that the acquisition will become a big driver of value for our stakeholders in the years to come,” he added.
Bajaj Finserv and Allianz have also signed agreements to ensure continuity of reinsurance and other services during the transition period.
In its statement, Allianz SE said the decision to sell follows constructive and amicable discussions with Bajaj Finserv.
With the government likely to pass the much-awaited Insurance (Amendment) Bill to allow 100% FDI in the sector, Allianz may explore entering the market independently.
“India continues to be one of Allianz’s growth markets, and Allianz will explore new opportunities that strengthen its position in the market and expand its potential to serve not only as an investor but also as an operator,” Allianz said.
Allianz added that the transaction is expected to take several months to close, and that the cash consideration will be received in tranches.
The deal is subject to regulatory approvals, including those from the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (Irdai).
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.