IAG sells its stake in SBI General Insurance for over Rs 3000 crore

Insurance Australia Group, the joint venture partner in SBI General Insurance, on Thursday said they have entered into definitive agreements to sell its entire stake of 26 per cent in the general insurance company with a couple of private equity investors.

Insurance Australia Group will sell 16.01 per cent of its 26 per cent stake to Napean Opportunities LLP, an affiliate of Premji Invest, a private equity firm.

The rest 9.99 per cent will be acquired by WP Honey Wheat lnvestment Ltd of the Warburg Pincus group.

On the stake sale, IAG MD&CEO Peter Harmer said, "IAG has enjoyed a strong and successful relationship with SBI since establishing SBI General joint venture in 2009. With our sharpened focus on core territories of Australia and New Zealand, now is the right time of IAG to exit its investment in SBI General."  

IAG values the deal at over 640 million Australian dollars, which when converted to rupees at an exchange rate of Rs 48/A$dollar values the deal at Rs 3,072 crore.

Following the completion of the deal, SBI will still continue to be the majority shareholder in the general insurance company with 70 per cent stake and Premji Invest along with Warburg Pinvus will jointly hold 26 per cent.

IAG in a press release said,” The transactions, which are subject to regulatory processes and approvals, are expected to complete during IAG’s financial year ending June 2020”.

SBI General was valued at over Rs 12,000 crore recently following last year SBI’s 4 per cent stake sale in its general insurance arm for over Rs 482 crore.