ICICI Lombard General Insurance said that it entered into a definitive agreement to purchase Bharti AXA General Insurance, promoted by Bharti Enterprises. The deal will create India's third largest non-life insurance company, with a combined annual premium of Rs 16,447 crore and a market share of nearly 8.7 per cent.
"The board of ICICI Lombard General Insurance at its meeting held on August 21, 2020, considered and approved a 'scheme of arrangement' amongst Bharti AXA General Insurance (demerged company) and former company and their respective shareholders and creditors," ICICI Lombard, owned by ICICI Bank, said in a filing to the stock exchanges over the weekend.
Bharti Enterprises currently owns 51 per cent and French insurance company AXA has a 49 per cent stake in Bharti AXA General Insurance.
The shareholders of Bharti AXA will receive 2 shares of ICICI Lombard for every 115 shares of Bharti AXA held as on the date of approval of the 'scheme of arrangement' by the board of ICICI Lombard and Bharti AXA.
Bharti AXA General Insurance will cease to be a going concern, after the demerger.
Bhargav Dasgupta, MD & CEO of ICICI Lombard, said, "This is a landmark step in the journey of ICICI Lombard and we are confident that this transaction would be value accretive for our shareholders...We would also like to reassure Bharti AXA's policyholders and channel partners of seamless business continuity and maintaining highest standards of customer service."
ICICI Lombard is of the opinion that the consolidation will create a robust and financially strong insurer offering a wide product suite, more access points and comprehensive services to customers.
At 10:15 am, the shares of ICICI Lombard were trading at Rs 1,296, higher by 0.6 per cent on the BSE, which were more-or-less in line with the Sensex's gains of 0.5 per cent. The shares of ICICI Lombard had opened at the intra-day high of Rs 1,304.80 and have touched a low of Rs 1,275.25 thus far.