Bajaj Finserv Ltd. is set to take full ownership of its insurance businesses, Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC), by acquiring the remaining 26 per cent stake held by its German partner, Allianz SE.
Under its Share Purchase Agreements (SPAs) the deal is valued at Rs 13,780 crore for Bajaj Allianz General Insurance and Rs 10,400 crore for Bajaj Allianz Life Insurance. This will increase Bajaj Finserv’s stake in both companies from 74 per cent to 100 per cent, making them fully owned entities of the Bajaj Group.
This acquisition, however, is subject to approvals from regulators, including the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (Irdai).
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This is how the acquisition is structured:
Bajaj Finserv Ltd. will buy around 1.01 per cent stake
Bajaj Holdings and Investment Ltd. will acquire 19.95 per cent
Jamnalal Sons Pvt. Ltd. will take 5.04 per cent
Once the first trance of at least 6.1 per cent is acquired and Allianz is reclassified from a ‘Promoter’ to an ‘Investor’, the joint venture agreements will be officially terminated.
This move further marks the end of a 24-year-old joint venture (JV) between Bajaj and Allianz in India’s insurance sector.
Post-acquisition, the BFS stake will be 75.01 per cent in both companies. Once the JVs are terminated under the terms of the SPA, the Bajaj Group and Allianz are going to independently pursue their insurance strategies in India.
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Commenting on this acquisition, Sanjiv Bajaj, Chairman and MD of Bajaj Finserv said, “Together with Allianz, we have built two of the strongest insurance companies in India. With full ownership, we are confident that this move will drive greater value for our stakeholders."
The Bajaj Group is seeing this acquisition move as a step to advance next-gen insurance solutions for customers across India, driven by new technologies. The deal will also bring the two insurance ventures entirely into the fold of the Bajaj Group.
