The deal to acquire a stake in RQBE can extend Paytm’s drive for financial inclusion of Indians and offer insurance protection to millions of its users
Indian payments firm Paytm’s co-founder and CEO Vijay Shekhar Sharma has reached an agreement to acquire a 51% stake in Raheja QBE General Insurance (RQBE) Company from Prism Johnson for INR2.89bn ($38.8m).
The board of directors of Prism Johnson had also approved the stake sale. RQBE is a joint venture between Prism Johnson and QBE Australia.
Paytm’s parent company One97 Communications, through one of its subsidiaries QorQl is making the acquisition. The deal’s closure will result in the termination of the joint venture.
The remaining 49% stake in RQBE Insurance is held by QBE Australia and One97 stated that it is also in the process of acquiring the stake held by QBE Australia.
Paytm president Amit Nayyar said: “It is an important milestone in Paytm’s financial services journey, and we are very excited to welcome Raheja QBE General Insurance into the Paytm family.
“Its strong management team will help us accelerate our journey of taking insurance to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products.”
The deal could be closed by March 2021
The company announced that it is in the process of fulfilling customary conditions including approval from the Insurance Regulatory and Development Authority of India (IRDAI). Subject to the receipt of all approvals, the deal is expected to be closed by March 2021.
Prism Johnson managing director Vijay Aggarwal said: “We are happy to announce the sale transaction of our entire 51 per cent stake in Raheja QBE General Insurance Company Limited. Our decision to sell our stake in Raheja QBE is in line with our mission to create sustainable shareholder value and will enable us to focus our resources on our core businesses.
“This move will help the insurance business scale up to new heights by leveraging the large customer base and innovative products offered by Paytm. I would like to thank Raheja QBE’s management team and all the employees for their strong contribution and commitment over the years and wish them every success.”