ICICI Lombard General Insurance Company on Friday said, sectoral regulator Insurance Regulatory and Development Authority (IRDAI) has given its final approval for the demerger of the general insurance business of Bharti AXA General Insurance to itself by way of a scheme of arrangement.
"In this regard, the company on September 3, 2021, has received a letter from IRDAI granting final approval to the proposed scheme," ICICI Lombard said in a regulatory filing.
The appointed date for the scheme was April 1, 2020.
"The demerger and transfer of general insurance business, as envisaged in the scheme, shall be effective within 3 days from the date of the final approval," said the insurer.
Further, it said, the IRDAI has also granted approval to ICICI Bank for bringing down its stake in ICICI Lombard to 30 percent, subject to compliance with the Insurance Act, 1938 and applicable regulations.
IRDAI, in its order, said it grants final approval for demerger of general insurance business of Bharti AXA General Insurance Co Ltd to ICICI Lombard General Insurance Co Ltd by way of a scheme of arrangement.
Last year, ICICI Lombard entered into a definitive agreement to acquire Bharti Enterprises-promoted Bharti AXA General Insurance in an all-stock transaction. Based on the share exchange ratio recommended by independent valuers and accepted by the boards of the two companies, the shareholders of Bharti AXA shall receive two shares of ICICI Lombard for every 115 shares of Bharti AXA held by them.
Bharti Enterprises currently owns 51 percent stake in Bharti AXA General Insurance, while French insurer AXA has 49 percent. Post demerger, Bharti AXA General Insurance will cease to be a going concern and both Bharti Enterprises and AXA will exit the non-life business.