Bajaj Finserv has reached an agreement to acquire Allianz SE’s 26% stake in their two joint ventures: Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC). The total consideration for the transaction amounts to ₹24,180 crore. This deal marks the end of a partnership between the Bajaj Group and Allianz that has lasted for over two decades.
“The agreed consideration for a 26% stake in BAGIC and BALIC is ₹13,780 crore and ₹10,400 crore respectively,” Bajaj Finserv confirmed in a regulatory filing on Monday.
The two companies initiated their joint venture in 2001, with Allianz holding a 26% stake, which was the maximum allowed to foreign investors at that time. Although India has since increased the foreign direct investment (FDI) cap in the insurance sector to 74%, tensions arose between the partners in recent years. Allianz was reportedly keen to increase its stake, but Bajaj was unwilling to relinquish control.
In October, Bajaj Finserv indicated that Allianz had expressed its interest in exiting the JVs in both life and general insurance. “The execution of the SPAs marks the culmination of constructive and amicable discussions to ensure a seamless transfer of the stake of Allianz,” Bajaj Finserv stated.
With the acquisition of Allianz’s stake, the Bajaj Group’s ownership in both BAGIC and BALIC will increase to 100% from the current 74%. Bajaj Finserv further noted that the 24-year-old JV agreements with Allianz SE will be terminated upon the completion of the first tranche of the acquisition—comprising at least 6.1%—and once Allianz is reclassified from ‘promoter’ to ‘investor’.
Sanjiv Bajaj, chairman and managing director, Bajaj Finserv, commented, “Together with Allianz, we have built two of the strongest insurance companies in India with a combined premium exceeding ₹40,000 crore, while maintaining industry-best solvency margins. Given the advantage of a single ownership in both companies, we are confident that the acquisition will become a big driver of value for our stakeholders in the years to come.”
Bajaj Finserv and Allianz have also signed agreements to ensure the continuation of reinsurance and other services during the transition period.
In its statement, Allianz SE mentioned that the decision to sell followed constructive and amicable discussions with Bajaj Finserv. With the Indian government possibly passing the long-awaited Insurance (Amendment) Bill to allow 100% FDI in the sector, Allianz may explore entering the market independently.
“India continues to be one of Allianz’s growth markets, and Allianz will explore new opportunities that strengthen its position in the market and expand its potential to serve not only as an investor but also as an operator,” Allianz said.
Allianz added that the transaction is expected to take several months to finalize and that the cash consideration will be received in installments. The deal is contingent on regulatory approvals from bodies such as the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (Irdai).
