Bharti Axa is a joint venture between French insurance major AXA and Indian conglomerate Bharti Enterprises


ICICI Lombard and Bharti Axa General Insurance reportedly in talks over possible deal. (Credit: StockSnap from Pixabay)

Indian insurance firms ICICI Lombard and Bharti AXA General Insurance (Bharti AXA GI) are in advanced talks for a potential merger, reported livemint, citing two people having knowledge of the developments.

The publication further wrote that the two general insurance companies are negotiating the valuation of Bharti AXA, which is jointly owned by French insurance major AXA and Indian conglomerate Bharti Enterprises.

One of the two sources has been quoted by the publication as saying: “The two companies are still in discussion and the plan is that ICICI Lombard will acquire the entire stake of both Bharti Enterprises and AXA.

“Bharti AXA has a much smaller business, but the two companies are willing for the merger. The pricing has not been finalized yet.”

The source further told livemint that ICICI Lombard is in talks with two more general insurers regarding similar acquisitions.

Last month, The Economic Times, citing undisclosed sources, reported that ICICI Lombard was exploring a deal to acquire its rival general insurer in an all-stock deal in the range of INR25bn-INR 28bn ($334m-$374m).

ICICI Lombard and Bharti AXA are yet to confirm news on the potential deal

The ICICI Bank subsidiary at that time did not confirm nor rejected the news report. However, it did say that from time to time it looks into and evaluates various opportunities when considered appropriate.

In June 2020, ICICI Bank sold a stake of 3.96% in ICICI Lombard General Insurance to raise proceedings of $300m. The Indian private sector bank has a stake of around 52% in the general insurance company.

Bharti Enterprises, which currently has a stake of 51% in Bharti AXA, has been looking to move away from its financial service business. In this regard, the conglomerate in 2011 attempted to sell its then stake of 74% in Bharti AXA Life Insurance and Bharti AXA General Insurance to Reliance Industries, but the deal collapsed.

In 2015, AXA increased its stake in the two insurance joint ventures to 49% each by acquiring a 17% stake in each of the two firms from Bharti Enterprises.