Allianz to explore new avenues in India after exit from Bajaj JVs

Bajaj Group will acquire the 26 per cent stake in BALIC for Rs 10,400 crore and in BAGIC for Rs 13,780 crore from Allianz

Munich-based Allianz will explore new opportunities in the Indian insurance market not only as an investor but also as an operator, the company told Business Standard on Tuesday.

 

“India will continue to be one of Allianz’s main growth markets, and Allianz will explore new opportunities to further grow its participation in the Indian insurance market in the future, not only as an investor but also as an operator,” the company said.

 

This comes after the Germany-based financial services company signed a share-purchase agreement with Bajaj Finserv to sell its 26 per cent stake each in the insurance joint ventures it has with Bajaj Finserv — Bajaj Allianz Life and Bajaj Allianz General Insurance — for a total consideration of ₹24,180 crore.

 

Bajaj Group will acquire 26 per cent stake in BALIC for ₹10,400 crore and in BAGIC for ₹13,780 crore from Allianz.

 

The transaction is subject to necessary regulatory approvals, which are expected to take a number of months. Upon the transfer of shares and the cessation of Allianz being a promoter of the joint ventures, the agreements between Allianz SE and Bajaj Finserv will also be terminated.

 

“As the proceeds become available, Allianz will consider options for their deployment that support the company’s strategic ambitions, including the reinvestment of sale proceeds into potential new opportunities in India,” the company said in its statement, adding that it is committed to deeper capital infusion and integration of global expertise to achieve the Indian government’s vision of “Insurance for All by 2047”.

 

Following Allianz’s stake sale, Bajaj Group will own 100 per cent in both the insurance ventures. 

 

Meanwhile, in an interview to CNBCTV18, Bajaj Finserv Chairman and Managing Director Sanjiv Bajaj said they would not look for any other partner for both insurance ventures after acquiring Allianz’s 26 per cent in both companies. Additionally, Bajaj said both insurers would go public at a suitable time.

 

“The regulator has been engaging with large insurance companies on the possibilities of listing and putting a glide path and timeline to it. This is something that has been taken up by the boards of both insurers. Given the significance of this current action with Allianz exiting, it will take us some time for rebranding. As a result, the board, at a suitable time, will consider the nudge from the regulator and put out a path forward,” he said.

 

The regulator has been nudging large insurers that have vintage and have reached a certain scale to go public for better transparency.

 

“With 100 per cent stake in both companies, it allows us to build the businesses with our ambition and own assessment of risk,” Bajaj said.

 

He said once the first tranche of the shares is bought by the Bajaj Group, Allianz will be released from the non-compete clause and then they will be free to go ahead and get into binding agreements in India.

 

Shares of Bajaj Finserv closed 1.43 per cent on Tuesday, following the company’s announcement on Monday that Bajaj Group will acquire Allianz’s stake in the two insurance joint ventures.