Future Retail-IITL life insurance deal gets regulatory nod

Future Retail can now sell 22.5% stake in Future Generali India Life Insurance

Future Retail (formerly Pantaloon Retail), today informed the stock exchanges that it has received the necessary regulatory and government approvals namely  for the deal with with Industrial Investment Trust Limited (IITL) to sell 22.5% of its stake in Future Generali India Life Insurance. The company said that it has got nod from Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (Irda) and Competition Commission of India (CCI) for the same.

 

"Future Retail Ltd has now informed BSE that pursuant to receipt of the necessary approvals from governmental and regulatory authorities, namely CCI, IRDA and RBI, the said transaction has been consummated on December 17, 2013," said the company in a filing to the Bombay Stock Exchange (BSE). 

 

In March 2013, Pantaloon Retail decided to sell 22.5% of its stake in Future Generali India Life Insurance to Industrial Investment Trust Limited (IITL). The deal size is expected to be in range of Rs 350-360 crore. Post completion of the transaction, Future Group continues to hold 52% shares in the insurer with the other shareholders being Participatie Maatschappij Graafschap Holland NV and IITL. Pantaloon Retail held 25.5% stake in the insurance firm, as on September 30, 2013.

 

Systematix Capital Services Private Limited was the sole transaction advisor for the deal.

 

IITL is an investment company registered as a non-banking financial Company (non deposit taking) with the Reserve Bank of India (RBI) and is listed on the Bombay Stock Exchange and National Stock Exchange. IITL Group has subsidiary companies in the areas like real estate, infrastructure, stock broking and insurance broking.

 

Pantaloon Retail -- the country's largest retailer -- had de-merged its apparel and accessories business in April last year to a separate company in which Kumar Mangalam Birla's Aditya Birla Nuvo picked up a majority stake. The move was aimed at reducing -- Pantaloon's parent -- Future Group's debt by selling non-core assets.

 

Future General India Life Insurance is a joint venture, for life insurance business in India, between Future Group and the Italy-based Generali Group. Also, Future Group and Generali have joined hands for both the life and non-life insurance businesses in India.

 

Post completion of the transaction, the Future Group consisting of Pantaloon Retail and Sprint Advisory Services Private Limited (with 49% stake) will hold 52% shares in the life insurance company, while the foreign partner Participatie Maatschappij Graafschap Holland NV (which is a subsidiary of Assicuranzioni Generali S.P.A) have 25.5%. Foreign direct investment in the insurance sector is capped at 26%.