Bringing an end to almost a month's speculation, Japan's Nomura Holdings Inc bought 35 per cent stake in India's LIC Mutual Fund Asset Management Co Ltd (LICMF AMC), a unit of the country's largest insurer, the Life Insurance Corporation of India Ltd (LIC) for about Rs308 crore ($63 million), valuing the fund house at Rs880 crore. (See: LIC MF to sell 35 per cent stake to Nomura: reports)
As per the agreement between both parties signed in Mumbai on Saturday, the acquisition will be carried out by the Nomura Asset Management Co Ltd, a subsidiary of Nomura Holdings Inc.
Out of the Rs308 crore proceeds, Rs80 crore will go to LICMF and the rest to the existing shareholders of the asset manager.
The deal involves issue of fresh equity as well as secondary sale. On closing of the deal, LIC will hold 45 per cent stake in the LICMF AMC, Nomura would have 35 per cent and the remaining 20 per cent will be held by LIC Housing Finance.
Nomura Holding's deputy president and chief operating officer Takumi Shibata said: "It is vital to have a local partner with a strong reputation here. With LIC's exceptional brand image, we will be able to apply best practices to our combined business through our extensive experience as a global asset manager.''
LICMF's average assets under management for June 2009 were Rs32,415 crore, about 4.8 per cent of the total mutual fund assets and the seventh-largest in India.