Global insurance major Allianz SE said it has entered into binding share purchase agreements with Bajaj Finserv to sell its 26 per cent stake in its non-life and life insurance joint ventures (JV)– Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company – to the Bajaj Group for a total consideration of 2.6 billion euros, according to a late night statement.
The company had in October last year informed about its intent to sell stake in the JVs. According to reports, the global insurer had a dispute with the majority shareholder over the direction that the partnership was taking. The company was not being allowed to raise stake in the joint ventures at a discounted rate, and wasn’t having major say in strategic decisions, Bloomberg had reported.
“The decision to sell is the result of constructive and amicable talks with Bajaj Finserv Ltd. India continues to be one of Allianz’s growth markets, and Allianz will explore new opportunities that strengthen its position in the market and expand its potential to serve not only as an investor but also as an operator,” the company said.
As the funds become available upon transaction closure, Allianz said it would consider options for their deployment that support the company’s strategic goals, in particular the reinvestment of sale proceeds into potential new opportunities in India.
Allianz will adhere to its capital management policy as updated at the December 2024 Capital Markets Day, which includes a minimum level of distribution of earnings alongside the flexibility to fund disciplined deployment
The transaction is subject to obtaining regulatory approvals, which are expected to take a number of months, the insurer said. Upon the transfer of shares and the cessation of Allianz being a promotor of the joint ventures, the joint venture agreements between Allianz SE and Bajaj Finserv will be terminated.
Stake in Bajaj Allianz Financial Distributors too
Bajaj Finserv has released an exchange filing that they will also acquire Allianz’s stake in Bajaj Allianz Financial Distributors Ltd for ₹12.5 crore.
“In addition, the Board in line with the above decision, also approved acquisition of the entire equity stake held by Allianz in Bajaj Allianz Financial Distributors Limited (BAFDL), a 50:50 joint venture with the Company. Pursuant to the same, the Company would be acquiring 12,00,000 equity shares of face value of INR 10 each in BAFDL for a consideration not exceeding INR 12.5 crore from Allianz. Post the said acquisition, the entire share capital in BAFDL will be held by the Company”
