Bajaj Finserv announced that it has signed share purchase agreements (SPAs) with Allianz SE to acquire a 26% stake in two insurance joint ventures, Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC), for Rs 24,180 crore.
Bajaj Group's current 74% stake in the two insurance businesses will rise to 100% after the acquisition. The Bajaj Group plans to pay Rs 10,400 crore for a 26 percent stake in BALIC and Rs 13,780 crore for a 13 percent stake in BAGIC.
"The execution of the SPAs marks the culmination of constructive and amicable discussions to ensure a seamless transfer of Allianz's stake," the company said in a statement.
According to the terms of the SPA, Bajaj Finserv will acquire approximately 1.01 percent, Bajaj Holdings and Investments will acquire approximately 19.95 percent, and Jamnalal Sons will acquire approximately 5.04 percent of each insurance company, for a total of 26 percent.
Following the acquisition, Bajaj Finserv will own 75.01 per cent of both companies. Once the joint ventures are terminated in accordance with the terms of the SPA, the Bajaj Group and Allianz intend to pursue their insurance strategies independently in India.
The statement states that after the first acquisition tranche of at least 6.1% is finished and Allianz is reclassified as an investor rather than a promoter, the 24-year-old joint venture agreements between the Bajaj Group and Allianz SE for insurance businesses will be terminated.
"With a combined premium of over Rs 40,000 crore and industry-best solvency margins, we have built two of the strongest insurance companies in India together with Allianz," said Sanjiv Bajaj, chairman and managing director of Bajaj Finserv. "We are still dedicated to enhancing financial resilience, expanding insurance accessibility in India, and giving our clients the best possible service. Given the benefits of single ownership in both companies, we are confident that the acquisition will be a significant driver of value for our stakeholders in the years ahead."
In October, the non-banking financial company (NBFC) notified the exchanges that Allianz was considering exiting the joint venture. The German insurer owned a 26% stake in the life and general insurance ventures.
