Global investment firm the Carlyle Group today announced it has acquired a 9 per cent stake from BNP Paribas Cardif,the foreign partner in SBI Life Insurance for a consideration of Rs 4365 crore.
The Carlyle group paid Rs 515 per SBI Life's share and bought around 9 crore share from BNP Paribas Cardif.
Following this transaction, BNP Paribas Cardif and CA Emerald Investments now own 12.8 per cent(dropped from earlier 22 per cent) and 9 per cent of the company, respectively, while SBI remains the majority shareholder with a 62.1% stake in the company.
Carlyle’s equity for this investment came from CA Emerald Investments, an affiliated entity of Carlyle Asia Partners V, Carlyle’s flagship $6.55 billion fund focused on buyout and strategic investments across a range of sectors in Asia Pacific.
Dinesh Kumar Khara, Managing Director, Global Banking & Subsidiaries, SBI, said, “We are pleased with the tremendous strides made by SBI Life in establishing its position in the life insurance industry and appreciate the support given by BNP Paribas Cardif in this journey. We are also thrilled to welcome Carlyle, with whom we have an existing relationship through SBI Card, and look forward to its support to SBI Life in bolstering its franchise in the country.”
Sanjeev Nautiyal, Managing Director and CEO of SBI Life, said, “We are delighted to have Carlyle, a highly-regarded long-term investor, as a shareholder of the company. Carlyle’s trust in the company will further strengthen our resolve to enhance our leadership position in India’s life insurance industry through a single-minded focus on quality customer experience.”
Sunil Kaul, Managing Director of the Carlyle Asia Buyout advisory team, said, “The life insurance industry in India has strong growth potential thanks to favorable demographics and an increasing focus on financial savings. SBI is the most trusted brand in financial services, with an unparalleled nationwide branch network and a commitment to providing convenient access to quality financial services to every Indian. ”
Shares of SBI Life Insurance climbed 6.5 per cent to Rs 618 on the BSE in intra-day trade after CA Emerald Investments ("Emerald") acquired 9 per cent stake in the company through open market on Friday. The stock bounced back 21 per cent from its early morning low of Rs 510 on the BSE.
“I thank SBI for the quality of our partnership over the last 18 years in building together SBI Life, a strong life insurance franchise. We continue to be highly optimistic about the company’s future,” said Renaud Dumora, CEO of BNP Paribas Cardif.
Carlyle has invested in the financial services industry in Asia Pacific for 20 years, deploying more than US$4 billion of equity in more than 15 private equity investments as of December 31, 2018. In India, Carlyle’s recent investments in financial services include PNB Housing Finance Limited and SBI Card.