RIL acquires Bharti’s stake in AXA JVs
Moneylife Digital Team 11 June 2011

Through this deal, Bharti has exited the business in both Bharti AXA Life Insurance and Bharti AXA General Insurance

Reliance Industries has made its entry into the insurance business by agreeing to buy Bharti's 74% stake in its life insurance business Bharti-Axa. Through this deal, Bharti has exited the business in both Bharti AXA Life Insurance and Bharti AXA General Insurance.

This transaction is subject to negotiation and entering into legally binding agreements between RIL, Reliance Industrial Infrastructure (RIIL) and AXA and obtaining necessary approvals from IRDA1 and other relevant/applicable approvals.

On completion of the proposed transaction, RIL and RIIL would effectively own respectively 57% and 17% in both insurance companies and would become AXA's joint ventures partners in India. AXA would retain its current 26% shareholding and would continue to manage the day to day operations of the JVs.

The proposed agreement contemplates an option by which AXA would acquire from RIL and RIIL upto 24% shareholding in both the insurance companies in accordance with the applicable regulations as and when the FDI2 regulations permit such holding by AXA. Upon exercise of such option, RIL will effectively own 45%, RIIL will effectively own 5% and AXA the balance 50% in both the insurance companies.

RIL and AXA will join forces to create market leading life and general insurance businesses in India by leveraging their respective strengths and expertise.

In fiscal year 2011, Bharti AXA Life collected premiums of Rs7.9 billion and Bharti AXA GI collected gross direct premiums of Rs5.5 billion.

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