IRDAI approves acquisition of Bharti Axa General by ICICI Lombard

The Insurance Regulatory and Development Authority of India- IRDAI on November 27, 2020, approved the in-principle acquisition of Bharti AXA General Insurance Company’s non-life insurance business by ICICI Lombard General Insurance Company Limited.

Earlier the proposed acquisition was approved by the BSE Limited, Competition Commission of India (CCI) and National Stock Exchange of India Ltd. ICICI Lombard through an official statement informed that it is progressing applications for the receipt of approval from other regulators who are concerned for the transaction.

ICICI Lombard also informed that upon closing the proposed transaction, the entity will have a market share of 8.7% on a proforma basis in the non-life business.

What will be the result of the proposed transaction?

According to ICICI Lombard, the proposed transaction will result in value creation for all the stakeholders of the company with the help of operational synergies and meaningful revenue.

The policyholders will be benefitted from deeper customer connect touchpoints and an enhanced product suite. As part of the proposed deal, the shareholders of the demerged company, Bharti and AXA, will be allotted the equity shares of the combined entity of Rs. 10 each with AXA receiving the 17.52 million shares and Bharti shareholders receiving the 18.23 million shares.

Share exchange ratio accepted by the boards of Bharti AXA and ICICI Lombard:

According to the joint statement signed by both the companies, based on the share exchange ratio accepted by the respective boards of both the companies, the shareholders of Bharti AXA will be receiving two shares of ICICI Lombard for every 115 shares of Bharti AXA which was held by them as on the date on which the scheme of arrangement has been approved by the board of directors of Bharti AXA and ICICI Lombard.

About Bharti AXA General Insurance:

It is a joint venture between French insurer AXA with 49% of the stake and Bharti Enterprises with 51% of the stake. Both AXA and Bharti Enterprises will be exiting their non-life insurance business once all administrative, regulatory, and legal approvals are in place.