Bajaj Finserv to buy Allianz's 26% stake in Bajaj Allianz Life and General Insurance for Rs 24,000 crore

Despite the market correction, Bajaj Finserv shares have gained almost 20 percent year-to-date.

Bajaj Finserv on March 17 announced it has inked share purchase agreements with Allianz SE to acquire 26 percent stake in the insurance joint venture Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC) for Rs 24,180 crore ($2.83 billion), the companies said in a statement.

The move will take Bajaj group’s ownership in BAGIC and BALIC to 100 percent from the current 74 percent, the statement said. Bajaj will pay Rs 13,780 crore and Rs 10,400 crore respectively for the respective stakes in both firms, the company statement added.

The deal confirms Moneycontrol's exclusive story in January that said the almost 25-year-old partnership between the two firms will come to an end in March and FY25 will be the last year of operation for the joint venture.

Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, said, the firm's partnership with the Munich-based company was successful in maintaining "industry-best solvency margins" and exceeding a premium of Rs 40,000 crore together. Bajaj said single ownership in both the companies is likely to drive further growth.

“Given the advantage of a single ownership in both companies, we are confident that the acquisition will become a big driver of value for our stakeholders in the years to come,” Bajaj said in a statement.

The acquisition is subject to regulatory approvals, including approvals from the Competition Commission of India and the Insurance Regulatory and Development Authority of India, the company statement added.

Allianz clarified that it is 'committed' to India and it aims to make deeper capital infusion to achieve Centre's goal of "Insurance for all by 2047".

The Germany company said it will consider its investment options as the proceeds from the stake sale become available. "As the proceeds become available, Allianz will consider options for their deployment that support the company’s strategic ambitions, in particular the reinvestment of sale proceeds into potential new opportunities in India."