Insurance Australia Group (IAG) has decided to offload its entire 26% stake in SBI General Insurance Company, its joint venture with State Bank of India (SBI).
The Australian group will sell the interest to two separate firms including Napean Opportunities and an affiliate of Warburg Pincus for a total consideration of A$640m ($437m).
As per the terms of the agreements, Napean Opportunities, which is part of Premji Invest, will buy a 16.01% interest, while Warburg Pincus’s affiliate will acquire the remaining 9.99% stake.
Commenting on the deal, IAG managing director and CEO Peter Harmer said: “IAG has enjoyed a strong and successful relationship with the State Bank of India since establishing the SBI General joint venture in 2009.
“With our sharpened focus on our core territories of Australia and New Zealand, now is the right time for IAG to exit its investment in SBI General.”
Subject to regulatory approvals, the deal is scheduled to complete by end of June next year.
Media reports about IAG planning to divest part of its stake in SBI General Insurance first started appearing in January this year.
In September last year, SBI offloaded its stake in SBI General Insurance to Axis Asset Management and Premji Invest for INR4.82bn ($67.75m).
The transaction valued the general insurance JV at INR120bn ($1.686bn). Following the sale, SBI’s stake in the JV fell to 70%.
Founded in 2009, SBI General Insurance offers a number of insurance products including motor, health, personal accident, travel and home insurance in the retail space.
It also offers products including aviation, fire, marine, package, construction & engineering and liability insurance in the commercial space.