German insurance giant Allianz to sell stake in Bajaj JVs for Rs 24,600 crore
The transaction is subject to obtaining necessary regulatory approvals, which are expected to take a number of months
Allianz entered into binding share purchase agreements with Bajaj Finserv Ltd to sell its 26 per cent stake in its successful non-life and life insurance joint ventures (Archives) German insurance giant Allianz SE has decided to exit from its Indian insurance joint ventures with the Bajaj group. Nearly one and a half months after the government allowed 100 per cent FDI in insurance ventures, Allianz has decided to sell its 26 per cent stakes in life and non-life joint ventures with the Bajaj group for Rs 24,600 crore.
Allianz entered into binding share purchase agreements with Bajaj Finserv Ltd to sell its 26 per cent stake in its successful non-life and life insurance joint ventures – Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC) – to the Bajaj group for a total consideration of euro 2.6 bn. Allianz may receive the proceeds in several tranches, Allianz said in a statement.
Bajaj Finserv said it would be acquiring from Allianz 11.13 lakh equity shares of Rs 10 each in BAGIC at a price of Rs 4,808.24 per share and 15.22 equity shares of Rs 10 each in BALIC at a price of Rs 2,654.12 per share, amounting to 1.01 per cent equity stake in each of the companies, together with all rights, title, benefits and interest therein, as per the SPAs executed with Allianz.
BAGIC had underwritten a premium of Rs 20,472 crore for FY2024. BALIC reported a premium income of Rs 11,492 crore in FY 2024, according to Life Insurance Council data.
With the above acquisition, the company would be holding 75.01 per cent of the total equity share capital in each of BAGIC and BALIC. “Further, after the structuring, it is proposed that Bajaj Holdings and Investment Ltd. and Jamnalal Sons Pvt Ltd will acquire approximately 19.95 per cent and 5.04 per cent of the paidup equity capital, respectively, in each of the two insurance companies,” Bajaj Finserv said in an exchange filing.
The entire equity share capital in the said two insurance companies will be held by Bajaj Finserv (75.01 per cent) and the promoter entities (collectively 24.99 per cent). In addition, the board in line with the above decision, also approved acquisition of the entire equity stake held by Allianz in Bajaj Allianz Financial Distributors Limited (BAFDL) a 50:50 joint venture with Bajaj Finserv. It would be acquiring 12 lakh equity shares of face value of Rs 10 each in BAFDL for a consideration not exceeding Rs 12.5 crore from Allianz. After the acquisition, the entire share capital in BAFDL will be held by Bajaj Finserv.
“The decision to sell is the result of constructive and amicable talks with Bajaj Finserv Ltd. India continues to be one of Allianz’s growth markets, and Allianz will explore new opportunities that strengthen its position in the market and expand its potential to serve not only as an investor but also as an operator,” the Munich-based firm said.
“As the proceeds become available, Allianz will consider options for their deployment that support the company’s strategic ambitions, in particular the reinvestment of sale proceeds into potential new opportunities in India,” Allianz said. Allianz will adhere to its capital management policy as updated at the December 2024 Capital Markets Day, which includes a minimum level of distribution of earnings alongside the flexibility to fund disciplined deployment, it said.
The transaction is subject to obtaining necessary regulatory approvals, which are expected to take a number of months. “Upon the transfer of shares and the cessation of Allianz being a promotor of the joint ventures, also the joint venture agreements between Allianz SE and Bajaj Finserv Ltd. will be terminated,” it said.
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