RIL to acquire Bharti stake in AXA insurance JV
10 Jun 2011
Reliance Industries has agreed to acquire Bharti Enterprises' stake in AXA, Bharti Enterprises, the joint venture that runs Bharti AXA Life Insurance Co Ltd and Bharti AXA General Insurance Co Ltd.
Reliance Industries Limited and AXA, Bharti Enterprises today announced that the two have an understanding on the acquisition by RIL and its associate Reliance Industrial Infrastructure Limited of Bharti's 74 per cent shareholding in Bharti AXA Life Insurance Co Ltd and Bharti AXA General Insurance Co Ltd.
On completion of the proposed transaction, RIL and RIIL would effectively own respectively 57 per cent and 17 per cent, respectively, in both insurance companies and would become joint venture partners of French insurer AXA in India.
AXA would continue to hold its 26 per cent shareholding and would continue to manage the day-to-day operations of the two JVs.
AXA would also have an option to acquire from RIL and RIIL up to 24 per cent shareholding in both the insurance companies in accordance with the applicable regulations as and when the FDI regulations permit such holding by AXA.
Upon exercise of such option, RIL will effectively own 45 per cent and RIIL 5 per cent in the JV while AXA will hold the balance 50 per cent in both the insurance companies.
The transaction is subject to negotiation and legally binding agreements between RIL, RIIL and AXA and is contingent on obtaining necessary approvals from IRDA and other regulators as also shareholders.
Bharti AXA Life collected premiums of Rs790 crore (Euro 132 million) and Bharti AXA GI collected gross direct premiums of Rs550 crore (Euro 92 million) in fiscal year 2010-11.