ICICI Lombard General Insurance Company and Bharti AXA General Insurance Company in their respective board meetings approved entering into definitive agreements for demerger of the latter's non-life insurance business into the former's through a Scheme of Arrangement.
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As part of the deal, the shareholders of Bharti AXA shall receive 2 shares of ICICI Lombard for every 115 shares of Bharti AXA held by them as on the date on which the Scheme of Arrangement is approved, according to a statement.
The merged entity will become the third-largest general insurance company in the country and both the firms expect the transaction to be concluded in one year. The deal will result in an annual premium of Rs 16,447 crore on a combined basis with a market share of 8.7 percent.
"The Board of Directors of the Company at its Meeting held on August 21, 2020, based on the recommendation of the Audit Committee have approved the proposed Scheme subject to all applicable statutory and regulatory approvals," said a statement by ICICI Lombard.
Bharti Enterprise owns 51 percent and French multinational insurance firm AXA owns 49 percent in Bharti AXA General Insurance.
“This is a landmark step in the journey of ICICI Lombard and we are confident that this transaction would be value accretive for our shareholders. We are excited by the capabilities and strengths that Bharti AXA will add to our franchise. The company has a talented employee base with a strong cultural fit, and we look forward to welcoming them to the ICICI Lombard family. We would also like to reassure Bharti AXA’s policyholders and channel partners of seamless business continuity and maintaining highest standards of customer service," said Bhargav Dasgupta, MD & CEO of ICICI Lombard.
Rakesh Bharti Mittal, Chairman of Bharti AXA General Insurance said, “We are delighted that the partnership between Bharti and AXA has been successful in laying down a solid foundation in the domestic insurance landscape. Over the past few years, our business demonstrated consistent growth, forged productive partnerships and increased the distribution footprint significantly. We are confident that the proposed amalgamation of our business with ICICI Lombard will bring greater business synergies and create value for all stakeholders.”
Bharti AXA Life Insurance business, however, will continue to remain intact.
First Published: IST