Bharti AXA’s non-life insurance business is set to merge with ICICI Lombard General Insurance, in what will end up creating the country’s third largest non-life insurance company.
“The board of directors of ICICI Lombard General Insurance Company and Bharti AXA General Insurance Company at their respective meetings held today, approved entering into definitive agreements for demerger of Bharti AXA’s non-life insurance business into ICICI Lombard through a Scheme of Arrangement,” the companies said in a statement on Saturday.
Based on the share exchange ratio recommended by independent valuers and accepted by the respective boards of the companies, the shareholders of Bharti AXA will receive two shares of ICICI Lombard for every 115 shares of Bharti AXA on the date when the Scheme of Arrangement is approved by the boards of both companies.
“The combined entity shall have a market share of about 8.7 per cent on pro-forma basis,” the statement said, adding that the through the proposed transaction, ICICI Lombard shall be able to augment its distribution strength with Bharti AXA’s existing distribution partnerships.
The transaction is subject to regulatory approvals, following which the non-life insurance business will be demerged from Bharti AXA into ICICI Lombard.
Bhargav Dasgupta, Managing Director and CEO, ICICI Lombard General Insurance 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.”
“Over the past few years, our business demonstrated consistent growth, forged productive partnerships and increased the distribution footprint significantly. We are confident that the proposed amalgamation of our business with ICICI Lombard will bring greater business synergies and create value for all stakeholders,” said, Rakesh Bharti Mittal, Chairman, Bharti AXA General Insurance.