The Representative

India's Youth News Tank

Bharti AXA General Insurance To Merge With ICICI Lombard

1 min read

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

•Q1 FY21:
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%

~PAT:
•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?

By: Radhika

Leave a Reply

Your email address will not be published. Required fields are marked *