Ageas Insurance International N.V. (Ageas) and SundaramNSE 0.00 % Finance of the $7.2 billion TVS Group announced today that they have signed an agreement wherein Ageas will acquire 40% of the share capital of Royal Sundaram General Insurance (Royal Sundaram) for a total consideration of Rs.1520 Cr.
Currently, Sundaram Finance Ltd holds 75.90% in Royal Sundaram and proposes to divest 25.90%, thereby retaining 50% of its holding, post the divestment. Some of the existing Indian shareholders will hold the balance 10% in Royal Sundaram.
The transaction is subject to conditions and will close in the first quarter of 2019.
T.T Srinivasaraghavan, Managing Director, Sundaram Finance, said “For the next phase of growth, we are delighted to be partnering with Ageas, whose global experience, including in several Asian countries, will be an asset. Ageas is unique in its approach of working through local partnerships and joint ventures across Asia and we believe this can create significant value for Royal Sundaram.”
For the year ended 31st March 2018, Royal Sundaram generated Gross Written Premium of Rs. 2643 crore. and achieved a Profit after Tax of Rs. 83 crore. while registering an average annual growth rate of 19% and 56% in GWP and Profit respectively, between 2015 and 2018.
Commenting on the agreement, Bart De Smet, CEO, Ageas, said “Partnering with Sundaram Finance, a well-established company with a vast knowledge of the Indian insurance market offers us a great opportunity to benefit from the potential of what is one of the world’s largest economies with an insurance industry that is expected to grow significantly in the coming years. We are confident that Ageas’s insurance expertise combined with Sundaram Finance’s market knowledge and position will take Royal Sundaram to a next level in terms of size and profitability.”
Source: Economic Times