The Insurance Regulatory and Development Authority of India (IRDAI) has approved, in principle, ICICI Lombard General Insurance Company’s proposed acquisition of Bharti AXA General Insurance.

The deal, which involves ICICI Lombard’s acquisition of the Bharti AXA business and their subsequent merger, was first announced in August this year. The consolidation is expected to lead to the formation of India’s third-largest non-life insurer.

The insurer previously secured approval from Competition Commission of India (CCI), BSE and National Stock Exchange of India for the takeover of Bharti AXA.

ICICI Lombard said it is advancing applications for receipt of requisite approval from other regulators for the deal.

According to the insurer, the consolidated entity will have a market share of 8.7% on proforma basis in the non-life business after the close of the transaction.

It also added that the deal would create value for all stakeholders through revenue and operational synergies.

As a part of the deal, shareholders of both Bharti and AXA will receive equity shares of the combined entity of INR10 each.  While Bharti shareholders will receive 18.23 million shares, AXA’s shareholders will receive 17.52 million shares.

Bharathi currently holds a 51% stake in the joint venture, while the remainder is held by French insurance company AXA. Both the firms will be public shareholders in the merged entity following the transaction.

ICICI Lombard offers a range of products including motor, health, crop, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels.