Bharti AXA General Insurance is the non-life joint venture between Indian business group Bharti and French insurance major AXA
ICICI Lombard and Bharti AXA have agreed to combine their respective non-life operations in India in an all-stock deal worth around €521m.
The merger of the two businesses is expected to result in the third-largest general insurance company in India with an annual premium of around INR164.47bn ($2.2bn).
The parties expect the enlarged non-life entity created post-merger to have a market share of nearly 8.7%.
Bharti AXA General Insurance has nearly 2,300 employees and has 152 branches across India. The company is engaged in the distribution of a suite of retail and commercial non-life products.
Under the terms of the deal, Bharti AXA’s shareholders will exchange 115 of their shares in return of two shares of ICICI Lombard.
As a result, a total of 35.8 million shares of ICICI Lombard, worth €521m, will be issued to Bharti AXA’s parent firms – French insurer AXA and Indian conglomerate Bharti, at the time of completion of the transaction.
Bharti AXA General Insurance chairman Rakesh Bharti Mittal said: “We are delighted that the partnership between Bharti and AXA has been successful in laying down a solid foundation in the domestic insurance landscape. 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.”
According to ICICI Lombard, the proposed business combination will offer it a significant opportunity to consolidate its position in the general insurance segment. Besides, the deal is said to help the company augment its strength in distribution with Bharti AXA’s existing distribution partnerships.
ICICI Lombard General Insurance CEO comments on the acquisition of Bharti AXA General Insurance
ICICI Lombard General Insurance MD and CEO Bhargav Dasgupta 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 are excited by the capabilities and strengths that Bharti AXA will add to our franchise.
“The company has a talented employee base with a strong cultural fit, and we look forward to welcoming them to the ICICI Lombard family. We would also like to reassure Bharti AXA’s policyholders and channel partners of seamless business continuity and maintaining highest standards of customer service.”
The deal is subject to the receipt of regulatory approvals and the meeting of other customary closing conditions, following which it is anticipated to be wrapped up by the fourth quarter of 2021.