L&T, Future Generali call off insurance JV plan
22 April 2014
Larsen & Toubro (L&T) and Kishore Biyani-led Future Group on Monday announced the termination of their joint venture agreement on for general insurance business.
The two said in separate statements that they are calling off their joint venture because of "inordinate delay" in finalisation.
The two had, on 26 March 2013, announced a deal between L&T General Insurance (LTGI), the general insurance subsidiary of L&T and Future Generali Insurance for formation of a joint venture that would combine and continue the business of general insurance in India.
L&T General Insurance and Future Generali Insurance had entered into a non-binding agreement to jointly examine the terms of a potential transaction.
Under the agreement, the Future Group was to sell 51 per cent of its stake in general insurance venture with Italy's Generali.
''The parties have now decided mutually to call off the discussions around the proposed joint venture. L&T General Insurance will continue its focus on expanding its business footprint in the areas of both general and health insurance,'' L&T General Insurance said in a filing with the Bombay Stock Exchange (BSE).
The deal had valued Future Generali India Insurance Company at around Rs1,100 crore and the value of the deal at over Rs560 crore.
On completion of the merger, L&T was envisaged to have 51 per cent stake, while Generali would hold 26 per cent shareholding and the balance would be held by Future Group in the merged entity.
Currently, the Future Group holds 74 per cent stake in Future Generali India Insurance Company, while the rest is with Italy-based Generali Group.