ICICI Lombard General Insurance Co. Ltd. and Bharti AXA General Insurance Co. Ltd are planning to merge their insurance businesses, which once completed will form the country’s third-largest general insurance entity.
After the board meetings on Friday, a scheme of arrangement with Bharti AXA General Insurance Company was cleared. As per the scheme of the arrangement, ICICI Lombard would be acquiring Bharti AXA General Insurance.
On the basis of share exchange ratio suggested by independent valuers, shareholders of Bharti AXA will be receiving two shares of ICICI Lombard for every 115 shares of Bharti AXA.
As of now, promoter ICICI Bank Ltd holds is 51.89 percent stake in ICICI Lombard, while the rest is with the public. After the proposed deal, promoter stake will be slashed to 48.11 percent.
As a part of the agreement, shareholders of the demerged company i.e. Bharti and AXA will be provided with equity shares of the combined entity of Rs10 each with Bharti shareholders receiving 18.23 million shares and AXA receiving 17.52 million shares.
At present, Bharti Enterprises acquired 51 percent in Bharti AXA General, while its France-based Joint Venture partner AXA has 49 percent.
ICICI Lombard is a listed insurance firm, and after the deal, Bharti and AXA will be public shareholders.
The proposed amalgamated non-life insurance company is likely to earn a total annual premium of minimum Rs16,447 crore on a combined basis with market share of around 8.7 percent, reported Livemint.com.
“We are excited by the capabilities and strengths that Bharti AXA will add to our franchise… We would also like to reassure Bharti AXA’s policyholders and channel partners of seamless business continuity and maintaining the highest standards of customer service,” said Bhargav Dasgupta, managing director and CEO of ICICI Lombard.