ICICI Lombard to be the third-largest insurer now as Bharti AXA General Insurance merges with Lombard in a ₹2,800 Cr share swap deal
This deal will value Bharti AXA General now at around ₹2,700 Cr
Bharti Enterprises & French multinational insurer AXA hold 51% & 49% #stake respectively in Bharti AXA General
However, when companies get necessary approvals, the non-life insurance #business will be demerged from Bharti AXA into ICICI Lombard
Bharti AXA General’s solvency or minimum capital requirement stood at 1.77 as against the regulatory requirement of 1.5
Bharti Enterprises had been looking for a buyer for its general #insurance business for the last 7-8 yrs
In 2011 Bharti was in talks with RIIL to sell its stake (which then stood at 74%) in its life & general insurance ventures
While Reliance Industries Limited was to acquire 57%, RIIL was to buy the remaining 17% of Bharti’s stake in the two insurance companies. But it was called off in Nov’11
As of July 31st, 2020,
~Mkt share in general insurance sector:
•Bharti AXA General: 1.44%
•ICICI Lombard: 7.79%
•ICICI Lombard: ₹398.1 Cr
•Bharti AXA General: ₹38.66 Cr
There is clearly a stark difference between the end profits!
Do you think this merger will prove to be a balanced equation?