Bharti AXA non-life insurance business to merge with ICICI Lombard

Based on the share exchange ratio recommended by independent valuers and accepted by the respective boards of ICICI Lombard and Bharti AXA, the shareholders of Bharti AXA shall receive two shares of ICICI Lombard for every 115 shares of Bharti AXA held by them as on the date on which the Scheme of Arrangement is approved by the Board of Directors of ICICI Lombard and Bharti AXA, as per a joint press statement issued by both the companies.

The closing of the proposed transaction is subject to various conditions precedent, including regulatory approvals from the Insurance Regulatory and Development Authority of India, Competition Commission of India, The Securities and Exchange Board of India, Stock Exchanges, Reserve Bank of India, NCLT and approval of shareholders of both ICICI Lombard and Bharti AXA, amongst others. Upon obtaining all approvals, when the scheme becomes effective, the non-life insurance business will be demerged from Bharti AXA into ICICI Lombard, it added.

Bharti AXA General Insurance is a joint venture between Bharti Enterprises with 51 per cent stake and French insurer AXA with 49 per cent stake. After obtaining all regulatory approvals for the proposed amalgamation, both Bharti Enterprises and AXA will exit their non-life insurance businesses once all regulatory, administrative and legal approvals are in place.

“This is a landmark step in the journey of ICICI Lombard and we are confident that this transaction would be value accretive for our shareholders. We are excited by the capabilities and strengths that Bharti AXA will add to our franchise. We would also like to reassure Bharti AXA’s policyholders and channel partners of seamless business continuity and maintaining the highest standards of customer service,” said Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance.

Rakesh Bharti Mittal, Chairman, Bharti AXA General Insurance, said, “We are delighted that the partnership between Bharti and AXA has been successful in laying down a solid foundation in the domestic insurance landscape. Over the past few years, our business demonstrated consistent growth, forged productive partnerships and increased the distribution footprint significantly. We are confident that the proposed amalgamation of our business with ICICI Lombard will bring greater business synergies and create value for all stakeholders.”

The proposed transaction provides a meaningful opportunity for ICICI Lombard to consolidate its market-leading position in the non-life insurance sector, becoming the third largest non-life insurer. The combined entity shall have a market share of about 8.7 per cent on pro-forma basis. Through this proposed transaction, ICICI Lombard shall be able to augment its distribution strength with Bharti AXA General’s existing distribution partnerships.

The proposed transaction is expected to result in value creation for all stakeholders through meaningful revenue and operational synergies. Policyholders are also expected to gain from an enhanced product suite and deeper customer-connect touch-points. Employees of the combined business will also benefit via greater opportunities across functions and geographies.