India’s largest private sector general insurer ICICI Lombard said that it has received the final nod from the Insurance Regulatory and Development Authority of India (IRDAI) for its acquisition of Bharti Axa General Insurance.
The insurance regulator IRDAI’s final approval for the merger of the two general insurance businesses comes over a year after ICICI Lombard bought out Bharti Axa in an all-stock deal that reportedly valued the latter at over Rs 2,500 crore.
“IRDAI, through its communication dated September 3, 2021, has granted its final approval with respect to the said transaction,” ICICI Lombard said in a statement on Friday.
“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,” the insurer said.
IRDAI has also granted approval to ICICI Bank for bringing down its stake in ICICI Lombard to 30 per cent from the current 52%, subject to compliance with requisite regulations.
Separately, the insurance regulator has also asked the merged entity to maintain solvency requirements above the mandated 150% as well as permitted private lender ICICI Bank to infuse capital as necessary proportionate to new shareholding structure, in a letter on Friday as per stock exchange disclosures.
“The proposed transaction is expected to result in value creation for all stakeholders through meaningful revenue and operational synergies. Further, policyholders and partners should benefit from an enhanced product suite and deeper customer connect touch points,” ICICI Lombard added in the statement. “The employees of both the businesses will also benefit via greater opportunities across functions and geographies.”
Last year, ICICI Lombard entered into a definitive agreement to acquire Bharti Enterprises-promoted Bharti AXA General Insurance in an all-stock transaction.
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 per cent stake in Bharti AXA General Insurance, while French insurer AXA has 49 per cent.
