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Kotak Mahindra Bank has said Zurich Insurance Company has agreed to pick up 70 per cent stake instead of 51 per cent in its general insurance arm. In November, Zurich Insurance Company had announced plans to acquire a 51 per cent stake in Kotak Mahindra General through a combination of capital infusion and share purchase, followed by a subsequent acquisition of an additional stake of 19 per cent within a period of three years from the initial acquisition.
“The parties to the aforesaid transaction, viz., the bank, Zurich, and Kotak General have mutually agreed that Zurich will acquire 70 per cent stake in Kotak General by way of a combination of primary and secondary acquisitions in a single tranche, for a total consideration of approximately Rs 5,560 crore, instead of the proposal announced in our earlier disclosure,” the bank said in a regulatory filing. The other terms of the transaction remain unchanged, it said.
The proposed 70 per cent acquisition would be subject to fulfilment of customary conditions precedent, including the receipt of regulatory approvals from the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (Irdai), it said. As per the current regulatory guidelines, a foreign entity can own up to 74 per cent in an insurance venture in India.
Earlier this month, the Competition Commission of India (CCI) approved acquisition of 70 per cent stake by Zurich Insurance Company Ltd in Kotak Mahindra General Insurance Company Ltd. The acquirer is a wholly owned subsidiary of Zurich Insurance Group Ltd (Zurich Insurance Group). It is a leading multi-line insurer serving people and businesses in more than 200 countries and territories.
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