The transaction is subject to the approval of regulatory authorities and is expected to be completed by end of 2018
UK’s Legal & General Group Plc (Legal & General) on Friday announced that it will sell its 26 percent stake in IndiaFirst Life Insurance to private equity major Warburg Pincus for Rs 710.54 crore. This deal values the life insurance company at Rs 2,733 crore.
IndiaFirst Life is a joint venture between Bank of Baroda (44 percent stake), Andhra Bank (30 percent stake) and Legal & General (26 percent stake).
On completion of the deal, Legal & General said that the Legal & General Group accounts will show a pre-tax profit of approximately £45m and the disposal will also result in a marginal improvement in the Solvency II coverage ratio.
The transaction is subject to the approval of regulatory authorities and is expected to be completed by end of 2018.
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Simon Burke, Group Commercial Director, Legal & General, said that they have been a founding member of IndiaFirst Life and to have helped steer the company to its current position in the market, aided by support of joint venture partners, Bank of Baroda and Andhra Bank.
“Legal & General has refocused its insurance business in recent years on the UK and the US and as a consequence we have disposed of a number of operations, including our businesses in the Netherlands, Ireland, France, Egypt and the Gulf. We are now following this strategy in relation to our stake in IndiaFirst Life,” he added.
The insurance regulator, in December 2017, had allowed private equity firms to become promoters of insurance companies. However, it had said that there was a minimum lock-in period of five years during which the PE firm cannot exit the insurance venture.
Narendra Ostawal, Managing Director, Warburg Pincus, said that they are partnering with IndiaFirst Life to support the continued growth of the company and to help create value for all stakeholders.
Founded in 2009, IndiaFirst Life had over Rs 12,622 crore of assets under management as on March 31, 2018.
RM Vishakha, Managing Director and CEO, IndiaFirst Life, said: “We are truly fortunate that both our shareholding banks are confident and supportive of our plans. We look forward to continued strong growth under the combined guidance of our shareholders.”