Zurich Insurance Group has secured Indian competition regulator approval to acquire a 70% stake in Kotak Mahindra General Insurance Company (KMGIC).
The move is a strategic effort by the Switzerland-based insurer to establish a robust presence in the Indian non-life insurance market.
In a statement, the Competition Commission of India said: “Competition Commission of India approves acquisition of 70% stake in Kotak Mahindra General Insurance Company by Zurich Insurance Company.”
Zurich Insurance Company is a wholly owned subsidiary of Zurich Insurance.
Last November, Zurich Insurance agreed to acquire a 51% stake in KMGIC for approximately Rs40.51bn ($488m).
The investment combines fresh capital infusion and share purchase, representing the largest investment by an international strategic insurer in an Indian non-life insurance company.
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The transaction is expected to be finalised by 30 June 2024, reported HinduBusinessline.
Following the initial acquisition, Zurich Insurance plans to purchase an additional 19% stake within three years of closing the deal, elevating its ownership in the Indian insurer to 70%.
This is part of Zurich’s strategy to carve out a “leading non-life insurance franchise” in India.
Upon the completion of the 51% stake acquisition, KMGIC will no longer be a subsidiary of Kotak Mahindra Bank, which currently holds a 100% stake in the general insurance company.
The proposed transaction values KMGIC at Rs79.43bn on a post-money basis.
KMGIC offers a diverse portfolio of general insurance policies including motor vehicle, home, and property, commercial and health insurance.
Its product range extends to liability insurance, extended warranty insurance, various health insurance plans such as hospital cash, health indemnity policy, benefit policy and group insurance plans.