IRDAI has approved in-principle acquisition of General Insurance business of Bharti AXA General Insurance Company Limited (Bharti AXA) by ICICI Lombard General Insurance Company Limited, the company said in a statement.
Earlier, Competition Commission of India (CCI), BSE Limited and National Stock Exchange of India Limited approved the proposed acquisition.
“Upon closing of the proposed transaction, the consolidated entity will have a market share of 8.7% on proforma basis in the non-life business,” ICICI Lombard said in a statement. The proposed transaction is expected to result in value creation for all stakeholders through meaningful revenue and operational synergies, it added.
The policyholders should benefit from an enhanced product suite and deeper customer connect touch points, said India’s largest private non-life insurer.
Pursuant to the proposed combination, the entire general insurance business of Bharti AXA would be transferred by way of a demerger to ICICI Lombard in consideration of issuance of shares by ICICI Lombard to Bharti AXA.
Based on the share exchange ratio recommended by independent valuers, shareholders of Bharti AXA will receive two shares of ICICI Lombard for every 115 shares of Bharti AXA. At present, promoter ICICI Bank Ltd holds is 51.89% stake in ICICI Lombard, while the rest is with the public. After the proposed deal, promoter stake will come down to 48.11%.
As a part of the deal, shareholders of the demerged company i.e. Bharti and AXA will be allotted equity shares of the combined entity of Rs. 10 each with Bharti shareholders receiving 18.23 million shares and AXA receiving 17.52 million shares.
At present, Bharti Enterprises owns 51% in Bharti AXA General, while its France-based JV partner AXA has 49%.
ICICI Lombard is a listed insurance firm, and Bharti and AXA will be public shareholders in the combined entity after the deal.
The proposed merged non-life insurance company is expected to earn a total annual premium of at least Rs. 16,447 crore on a combined basis with market share of around 8.7%, said the two companies in a joint media release.
“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,” Bhargav Dasgupta, MD & CEO of ICICI Lombard General Insurance said earlier.
