Private equity firm The Carlyle Group has acquired 9% stake in Indian life insurance company SBI Life Insurance from BNP Paribas for an undisclosed price.
Image: BNP Paribas sold a 9% stake in SBI Life to Carlyle. Photo: courtesy of BNP Paribas.
Carlyle’s equity investment in SBI Life was made through CA Emerald Investments, an affiliated entity of Carlyle Asia Partners V, which is the global investment firm’s $6.55bn fund focused on buyout and strategic investments across various sectors in Asia Pacific.
Following the transaction, BNP Paribas, through its subsidiary BNP Paribas Cardif, has reduced its stake in SBI Life Insurance to about 12.8%.
The State Bank of India (SBI) remains to be the majority shareholder with a stake of 62.1% in the Indian private life insurance company.
SBI Life, which is a public limited listed company, was started as a joint venture by SBI with BNP Paribas in 2001.
According to Carlyle Asia Buyout advisory team managing director Sunil Kaul, the Indian life insurance industry has strong growth potential due to favorable demographics along with an increasing focus on financial savings.
Kaul said: “SBI is the most trusted brand in financial services, with an unparalleled nationwide branch network and a commitment to providing convenient access to quality financial services to every Indian. SBI Life, led by a strong management team, is helping deliver this promise in the life insurance space and is well-positioned to further benefit from industry trends.”
For BNP Paribas, the transaction is expected to create a capital gain after tax in excess of €450m in the group’s first quarter 2019 results. Furthermore, it is expected to have a positive effect on the Group CET1 ratio of nearly 5bp as at 31 March 2019.
BNP Paribas Cardif CEO Renaud Dumora said: “I thank SBI for the quality of our partnership over the last 18 years in building together SBI Life, a strong life insurance franchise. We continue to be highly optimistic about the company’s future.”
Earlier this year, SBI Life signed a bancassurance pact with Indian commercial bank Syndicate Bank to provide a comprehensive financial planning solution to its customers.
Under the agreement, more than 3,000 branches of Syndicate Bank in India will offer a range of SBI Life’s protection, wealth creation and savings insurance products to its customers.