Allianz to Sell Stake in Bajaj JVs
German insurance giant Allianz SE has decided to withdraw from its Indian insurance partnerships, agreeing to sell its stakes in its joint ventures with the Bajaj group for a substantial sum.
Allianz’s decision follows the Indian government’s recent allowance of 100% Foreign Direct Investment (FDI) in insurance ventures. The company will sell its 26% stakes in Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC) to the Bajaj group.
The total deal is valued at Rs 24,600 crore (€2.6 billion). Allianz will receive the proceeds in installments, according to a statement from the company. The transaction is pending regulatory approvals, which are expected to take several months.
Bajaj Finserv will acquire Allianz’s stake. The company will acquire 11.13 lakh equity shares of Rs 10 each in BAGIC at a price of Rs 4,808.24 per share, and 15.22 equity shares of Rs 10 each in BALIC at a price of Rs 2,654.12 per share. This constitutes a 1.01 per cent stake in each company, along with all the associated rights and interests as specified in the agreements.
BAGIC reported a premium of Rs 20,472 crore in fiscal year 2024. BALIC’s premium income for the same period was Rs 11,492 crore, according to data from the Life Insurance Council.
Following this acquisition, Bajaj Finserv will hold 75.01% of the total equity share capital in both BAGIC and BALIC.
“The decision to sell is the result of constructive and amicable talks with Bajaj Finserv Ltd. India continues to be one of Allianz’s growth markets, and Allianz will explore new opportunities…” – Allianz statement
Additionally, the board also approved the acquisition of Allianz’s entire equity stake in Bajaj Allianz Financial Distributors Limited (BAFDL), a 50:50 joint venture with Bajaj Finserv. Bajaj Finserv will acquire 12 lakh equity shares of face value Rs 10 each in BAFDL for no more than Rs 12.5 crore from Allianz. Following this acquisition, Bajaj Finserv will have complete ownership of BAFDL.
Allianz stated it would explore new opportunities in India. It also said it would adhere to its capital management policy from December 2024.
Upon the transfer of shares and the cessation of Allianz’s role as a promoter, the existing joint venture agreements between Allianz SE and Bajaj Finserv Ltd. will be terminated, the company confirmed.
