The Competition Commission of India (CCI) has approved the Axis Bank-Max Life Insurance transaction, which had faced several regulatory roadblocks from Insurance Regulatory Development Authority of India and the Reserve Bank of India over the issue of share purchase agreement.

According to the approved transaction by CCI, Axis entities which comprise Axis Bank, Axis Capital and Axis Securities will be acquiring 19% stake in Max Life Insurance as against the first deal in April where the bank had proposed to acquire 29% stake in Max Life Insurance.

Max Life is currently the largest non-bank owned private life insurer in India. Max Financial Services presently holds a 72.5% stake in Max Life while Mitsui Sumitomo Insurance and Axis Bank hold 25.5% and 2% stake, respectively.


On February 20, 2020, Axis Bank, Max Financial Services Limited and its subsidiary Max Life Insurance Company Limited signed a confidentiality and exclusivity arrangement to explore the possibility of Axis Bank entering into a long-term strategic partnership with Max Life. The Board of Directors at its meeting on April 27, 2020 had approved entering into an agreement with Max Financial Services Limited (MFSL) to acquire 29% stake (55,64,94,102 shares) in Max Life Insurance Company Limited. Axis Bank had noted that the acquisition of stake in Max Life Insurance will not fall within the related party transaction. The bank also noted that the shares will be acquired from the listed parent entity of the target company i.e., from Max Financial Services Limited.

The nature of consideration was cash consideration and the definitive agreements also provided for certain rights regarding governance of Max Life including the right of appointment of nominee directors, and affirmative vote rights for the bank and MFSL. Accordingly, MFSL will have the right to nominate four directors on the Board of Directors of Max Life and Axis Bank will have the right to nominate three directors on the Max Life Board. The bank underlined that post-completion of the series of transactions, Max Life will become a 70:30 joint-venture between MFSL and Axis Bank.

Axis Bank and MFSL had also agreed to certain Value Creation Options and related rights. It said that if the Value Creation Options are not consummated within 63 months from the closing, the transactions provide for a put option for Axis Bank on MFSL to sell all shares held by Axis Bank in Max Life at a price of Rs 294 per share (subject to adjustments mutually agreed between parties) within nine months of exercise of such put option.

Regulatory challenges with IRDAI and RBI

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