ICICI Lombard, Bharti AXA to merge general insurance businesses

ICICI Lombard General Insurance Company and Bharti AXA General Insurance Company have announced the merger of their businesses. The merger would result in an entity with a combined annual premium of Rs 16,447 crore and a market share of nearly 8.7%. The merger will happen through a scheme of arrangement.

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About the deal:

The board of directors of ICICI Lombard General Insurance Company and Bharti AXA General Insurance Company at their respective meetings approved entering into definitive agreements for demerger of Bharti AXA’s non-life insurance business into ICICI Lombard through a Scheme of Arrangement.
Once the deal is completed the combined entity will become the largest private non-life insurer and the 3rd largest non-life insurer in the general insurance industry after New India Assurance and United India Insurance.
The shareholders of Bharti AXA will receive 2 shares of ICICI Lombard for every 115 shares of Bharti AXA, held by them as on the date on which the scheme is approved by the board.
As a part of the deal, shareholders of the demerged company( i.e. Bharti and AXA) will be allotted equity shares of the combined entity of Rs 10 each, where Bharti will receive 18.23 million shares and AXA will receive 17.52 million shares which will amount to 521 million euro.
Currently, promoter ICICI Bank Ltd holds is 51.89% stake in ICICI Lombard & the rest by the public. After the deal, ICICI Bank Ltd stake will come down to 48.11%.
Post the merger, no special rights will be given to Bharti Enterprises or AXA and they will be categorised as public shareholders in the combined entity after the deal. Both Bharti Enterprises and AXA will exit the non-life business after the merger.