Under the original deal, announced in November last year, Zurich was to buy a 51% stake in the Kotak unit for Rs 40.51 billion and an additional 19% holding within three years of the first purchase
Bengaluru/Mumbai:
Zurich Insurance Group will buy a 70% stake in Kotak Mahindra Bank’s general insurance arm by paying Rs 55.60 billion (nearly $671 million) upfront instead of staggering the purchase as planned last year, the Indian lender said on Friday.
Under the original deal, announced in November last year, Zurich was to buy a 51% stake in the Kotak unit for Rs 40.51 billion and an additional 19% holding within three years of the first purchase.
The deal will be the largest investment by a global insurer in a non-life insurer in the Indian market.
The change in the deal’s terms will not affect Kotak General’s valuation, which was Rs 79.43 billion according to the filing from November 2023.
The deal is expected to be closed by June 30 subject to customary conditions and regulatory approvals.
The Competition Commission of India (CCI) has already approved Zurich Insurance Company buying 70 per cent stake in Kotak Mahindra General Insurance Company.
“India is one of the world’s most important markets with immense potential and we are pleased to be making a significant commitment with an excellent partner,” said Tulsi Naidu, Zurich’s Chief Executive Officer of Asia Pacific had said while signing the deal.
“With Kotak Mahindra Group’s high-quality franchise and expertise in Indian financial services, and Zurich’s deep distribution experience and class-leading capabilities in retail and commercial insurance, we are confident this partnership can bring strong innovation, know-how, and excellent customer experiences to the Indian general insurance market,” Naidu had said.
India is expected to become the third largest global economy by 2030 and presents significant untapped potential for the development of insurance solutions. The country’s rapid economic growth, coupled with low levels of insurance penetration, increasing awareness, strong digital infrastructure and expanded foreign ownership rules make it one of the most attractive and fastest growing insurance markets globally.
With inputs from Agencies