New Delhi, Nov 2 (SocialNews.XYZ) The Competition Commission of India (CCI) on Monday approved the acquisition of the general insurance business of Bharti AXA by ICICI Lombard General Insurance.
With the CCI nod, both ICICI Lombard and Bharti AXA General Insurance would form an integration committee to initiate the merger process and obtain multiple regulatory approvals.
In August this year, the board of directors of ICICI Lombard General Insurance Company Ltd and Bharti AXA General Insurance Company Ltd approved entering into definitive agreements for demerger of Bharti AXA's non-life insurance business into ICICI Lombard through a scheme of arrangement.
Apart from the CCI approval, the closing of the proposed transaction is subject to various conditions precedent, including regulatory approvals from the Insurance Regulatory and Development Authority of India (IRDAI), the Securities and Exchange Board of India (SEBI), stock exchanges, Reserve Bank of India, NCLT and approval of shareholders of both ICICI Lombard and Bharti AXA, among others.
Upon obtaining all the approvals, when the scheme becomes effective, the non-life insurance business will be demerged from Bharti AXA into ICICI Lombard.
Based on the share exchange ratio recommended by the independent valuers and accepted by the respective boards of ICICI Lombard and Bharti AXA, the shareholders of Bharti AXA shall receive two shares of ICICI Lombard for every 115 shares of Bharti AXA held by them as on the date on which the scheme of arrangement is approved by the board of directors of ICICI Lombard and Bharti AXA, according to a joint press statement issued by both the companies in August.
Bharti AXA General Insurance is a joint venture between Bharti Enterprises with 51 per cent stake and French insurer AXA with 49 per cent stake. Both Bharti Enterprises and AXA will exit their non-life insurance businesses once all regulatory, administrative and legal approvals are in place.
The statement said the proposed transaction provides a meaningful opportunity for ICICI Lombard to consolidate its market-leading position in the non-life insurance sector, becoming the third largest non-life insurer.
The combined entity shall have a market share of about 8.7 per cent on pro-forma basis. Through this proposed transaction, ICICI Lombard shall be able to augment its distribution strength with Bharti AXA General's existing distribution partnerships.
The proposed transaction is expected to result in value creation for all the stakeholders through meaningful revenue and operational synergies.
Policyholders are also expected to gain from an enhanced product suite and deeper customer-connect touchpoints. Employees of the combined business will also benefit via greater opportunities across functions and geographies, the joint release added.
Source: IANS
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