Axis Bank signs deal to acquire 29% stake in Max Life Insurance, raises its total share to 30%
In a regulatory filing, Axis Bank said that the transaction is subject to approval of Reserve Bank of India (RBI), Insurance Regulatory Authority of India (IRDAI) and Competition Commission of India (CCI)
Axis Bank is set to acquire 29 percent stake in Max Life Insurance Company from Max Financial Services Ltd. After the signing of the agreement, the bank’s stake in Max Life Insurance will increase to 30 percent.
In a regulatory filing, Axis Bank said that the transaction is subject to approval of Reserve Bank of India (RBI), Insurance Regulatory Authority of India (IRDAI) and Competition Commission of India (CCI).
The transaction is expected to be completed within 6 to 9 months.
“The development will result in a mutually beneficial and enduring relationship between Axis Bank and Max Life and bring the stability of a long term partnership to India’s fourth largest private life insurance franchise,” Axis Bank said.
Max Life will include Axis Bank logo in its brand tag line to demonstrate the close knit partnership from now on.
The announcement came after the three companies had signed a confidentiality and exclusivity arrangement on 20 February to explore the possibility of a strategic, long-term partnership between Axis Bank and Max Life.
Amitabh Chaudhry, MD and CEO, Axis Bank, said, “We see this joint venture creating immense value for our stakeholders given our long standing, high performing partnership with Max Life.”
Max Financial Services presently holds a 72.5 percent stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5 percent stake. Post completion of transactions, Max Life will become a 70:30 joint venture between MFS and Axis Bank.
In an interaction with Economic Times, a person who has knowledge about the matter said, “In the secondary share sale transaction, Max Financial Services Ltd will divest 28.6 per cent stake in Max Life Insurance for about Rs 1,600 crore to Axis Bank."
According to a report in NDTV, the deal will position Axis Bank in the league of other leading private and public sector lenders like HDFC Group, ICICI Bank and State Bank of India, which have stakes in life insurance companies.
Axis Bank shares slumped 8 percent today, eroding Rs 10,133 crore from its market valuation, after the company reported an 83 percent plunge in its September quarter net profit.
Axis Bank Tuesday reported over two-fold jump in net profit to Rs 1,680.85 crore for the third quarter ended 31 December
The gains in the early morning trade in BSE Sensex was driven by gains in index majors HDFC twins, Kotak Bank and Reliance Industries amid a positive trend in global markets