Ageas has agreed to acquire a 40% stake in Royal Sundaram General Insurance (RSGI), an Indian non-life insurance company, from Sundaram Finance and other shareholders for INR15.2bn (€186m).
The acquisition of the stake in Royal Sundaram General Insurance will be carried out by the Belgian insurance major’s Dutch subsidiary Ageas Insurance International.
Royal Sundaram General Insurance provides motor, health, personal accident, and home and travel insurance to individual customers. For commercial customers, the company offers specialized insurance products in fire, marine, engineering, liability and business interruption risks.
The company boasts of a nationwide network made up of over 5,600 agents, 700 branches in addition to collaboration with banks and other distribution partners.
In fiscal 2018, the general insurance company earned €321m with a net profit of €10m.
Sundaram Finance managing director TT Srinivasaraghavan said: “The company has demonstrated strong growth in its chosen segments and is witnessing a rapid growth in its profitability.
“For the next phase of growth, we are delighted to be partnering with Ageas, whose global experience, including several Asian countries, will be an asset. Ageas is unique in its approach of working through local partnerships and joint ventures across Asia and we believe this can create significant value for Royal Sundaram.”
Ageas said that the transaction aligns with its strategy and is part of a three-year plan called Connect21. As per the plan, the insurance major will look to expand its existing operations across fast growing markets with a particular focus on non-life insurance.
Ageas CEO Bart De Smet said: “Partnering with Sundaram Finance, a well-established company with a vast knowledge of the Indian insurance market, offers us a great opportunity to benefit from the potential of what is one of the world’s largest economies with an insurance industry that is expected to grow significantly in the coming years.
“Being already present in the Indian Life insurance market, we now will be able, through this new joint venture, to also fully grasp opportunities in the Non-Life market.”
Following the transaction, Sundaram Finance, which currently holds a stake of 75.90% in Royal Sundaram General Insurance, will bring it down to 50%. Certain existing Indian shareholders will retain the remaining 10% stake after the acquisition from Ageas.
Subject to the approval of regulatory authorities, the deal is anticipated to be completed in the first half of 2019.