MUMBAI: In the biggest insurance sector deal in India, Bajaj group will buy out Allianz’s 26% stakes in their life and non-life insurance ventures for Rs 13,780 crore and Rs 10,400 crore, respectively. The deal will make both insurers fully Indian-owned.
Under the share purchase agreement, Bajaj Finserv will acquire about 1%, Bajaj Holdings and Investment nearly 20%, and Jamnalal Sons 5%, totaling 26% in each company. After the acquisition, Bajaj Finserv’s stake in both firms will rise to just over 75%. Once the joint ventures are terminated, Bajaj and Allianz will pursue independent insurance strategies in India.
The 24-year-old partnership will end after Bajaj acquires at least 6.1% and Allianz is reclassified from promoter to investor. The company has filed the stock exchange disclosure.
Bajaj Allianz Life has an embedded value of nearly Rs 23,000 crore. The life insurance company has a 3% market share in term of premium, while the non-life venture has 7% market share as of Feb.
Sanjiv Bajaj, chairman and MD of Bajaj Finserv, said the two companies, built with Allianz, have a combined premium exceeding Rs 40,000 crore while maintaining strong solvency margins. He added that single ownership would help drive more value for shareholders.
Despite relaxed FDI limits, Allianz did not increase its stake due to a disagreement with Bajaj after a pre-agreed plan to raise the stake within 15 years could not be implemented.
Bajaj Holdings & Investment, formed after Bajaj Auto’s demerger in 2007, is an investment firm holding stakes in Bajaj Auto, Bajaj Finserv, and Maharashtra Scooters, earning through dividends, interest, and profits. Part of the Bajaj Group, founded by Jamnalal Bajaj in 1926, it operates separately from Jamnalal Sons.
