AXA, Bharti Enterprises (“Bharti”) and Reliance Industries Limited (“RIL”) announced having reached an understanding on the acquisition by RIL and its associate Reliance Industrial Infrastructure Limited (“RIIL”) of Bharti’s shareholding of 74% in Bharti AXA Life Insurance Co. Ltd (“Bharti AXA Life”) and Bharti AXA General Insurance Co. Ltd. (“Bharti AXA GI”).
This transaction is subject to negotiation and entering into legally binding agreements between RIL, RIIL and AXA and obtaining necessary approvals from IRDA1 and other relevant/applicable approvals.
On completion of the proposed transaction, RIL and RIIL would effectively own respectively 57% and 17% in both insurance companies and would become AXA’s joint ventures partners in India. AXA would retain its current 26% shareholding and would continue to manage the day to day operations of the JVs.
The proposed agreement contemplates an option by which AXA would acquire from RIL and RIIL up to 24% shareholding in both the insurance companies in accordance with the applicable regulations as and when the FDI2 regulations permit such holding by AXA. Upon exercise of such option, RIL will effectively own 45%, RIIL will effectively own 5% and AXA the balance 50% in both the insurance companies.
RIL and AXA will join forces to create market leading Life and General Insurance businesses in India by leveraging their respective strengths and expertise.
In fiscal year 20113, Bharti AXA Life collected premiums of INR 7.9 billion (or ca. Euro 132 million) and Bharti AXA GI collected gross direct premiums of INR 5.5 billion (or ca. Euro 92 million). In the recently concluded India Insurance Awards organised by Indian Insurance Review in conjunction with Celent, the General Insurance entity was rewarded with Personal Lines Growth Leadership Award for 2011.
Source : AXA
