Bajaj Finserv to buy Allianz's 26% stake in insurance JVs for Rs 24,180 cr

Bajaj Finserv on Monday said it has signed share purchase agreements (SPAs) with Allianz SE to acquire a 26 per cent stake in the two insurance joint ventures—Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC)—for Rs 24,180 crore.

 

Post the acquisition, Bajaj Group’s stake in the two insurance ventures will go up to 100 per cent from 74 per cent currently. Bajaj Group will acquire the 26 per cent stake in BALIC for Rs 10,400 crore and in BAGIC for Rs 13,780 crore.

 

“The execution of the SPAs marks the culmination of constructive and amicable discussions to ensure a seamless transfer of Allianz’s stake,” the company said in a statement.

 

Under the terms of the SPA, Bajaj Finserv will acquire approximately 1.01 per cent, Bajaj Holdings and Investment approximately 19.95 per cent, and Jamnalal Sons approximately 5.04 per cent, aggregating to 26 per cent in each of the insurance companies.

 

Post-acquisition, Bajaj Finserv’s stake will stand at 75.01 per cent in both companies. Once the joint ventures are terminated under the terms of the SPA, the Bajaj Group and Allianz aim to independently pursue their insurance strategies in India.

 

The acquisition by Bajaj Finserv is subject to regulatory approvals, including those from the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (Irdai).

 

According to the statement, the 24-year-old joint venture agreements between the Bajaj Group and Allianz SE in respect of insurance businesses will stand terminated upon the completion of the first tranche of acquisition of at least 6.1 per cent and the reclassification of Allianz from being a promoter to an investor.

 

Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, said, “Together with Allianz, we have built two of the strongest insurance companies in India, with a combined premium exceeding Rs 40,000 crore, while maintaining industry-best solvency margins. We remain committed to creating better access to insurance in India, greater financial resilience, and a superior experience for our customers. Given the advantage of 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.”

 

In October, the non-banking financial company (NBFC) had informed the exchanges that Allianz was considering exiting the joint venture. The German insurer held a 26 per cent stake in the life and general insurance ventures.

 

Allianz and Bajaj are fully committed to ensuring a smooth transition in a manner that minimises the impact on policyholders, intermediaries, and other stakeholders. Bajaj Finserv and Allianz have also entered into agreements that will ensure the continuity of reinsurance and other services during the transition, the company said in the statement.

 

In October, Bajaj Finserv had informed the exchanges that Allianz was considering exiting the joint venture.