Bajaj Group to Acquire Allianz’s Stakes in Indian Insurance Ventures
Bajaj group is set to acquire Allianz’s 26% stakes in their insurance ventures, effectively ending a 24-year-long partnership and making both insurers fully Indian-owned. The deal, valued at Rs 24,180 crore, will see Bajaj Finserv’s stake rise to over 75% in both the life and non-life insurance firms.
This strategic move allows both companies to pursue independent insurance strategies in India, aiming to enhance shareholder value. The acquisition, confirmed in the largest insurance sector deal in India to date, involves Bajaj acquiring a significant portion of the stakes.
Specifically, the deal comprises Rs 13,780 crore for the life insurance venture and Rs 10,400 crore for the non-life insurance venture. Under the share purchase agreement, Bajaj Finserv will acquire approximately 1%, Bajaj Holdings and Investment nearly 20%, and Jamnalal Sons 5% of each company. Following the acquisition, Bajaj Finserv’s stake will increase to just over 75% in both firms.
The acquisition marks the end of a long-standing partnership. The agreement stipulates that the 24-year-old partnership will conclude after Bajaj acquires at least 6.1% and Allianz is reclassified from promoter to investor. The company has already filed the necessary stock exchange disclosures.
Bajaj Allianz Life, holding an embedded value of almost Rs 23,000 crore, currently has about a 3% market share in terms of premium. The non-life insurance venture holds a 7% market share as of February.
Sanjiv Bajaj, chairman and MD of Bajaj Finserv, emphasized the value of the relationship, stating that the two companies, built in collaboration with Allianz, have a combined premium exceeding Rs 40,000 crore while maintaining robust solvency margins. He further noted that single ownership is expected to drive enhanced value for shareholders.
Despite the relaxed Foreign Direct Investment (FDI) limits, Allianz did not increase its stake following its pre-agreed plan to raise the stake within 15 years.
Bajaj Holdings & Investment, formed after Bajaj Auto’s demerger back in 2007, is an investment firm holding stakes in major companies, deriving its earnings from dividends, interest, and profits. As part of the larger Bajaj Group, which was established by Jamnalal Bajaj in 1926, it operates independently of Jamnalal Sons.
