Bajaj Finserv Takes Full Control of Insurance Ventures in Landmark Allianz Stake Acquisition

The Indian insurance sector witnessed a significant development as Bajaj Finserv Ltd announced its acquisition of Allianz SE’s entire 26% stake in their two joint venture insurance companies, Bajaj Allianz General Insurance Company Ltd (BAGIC) and Bajaj Allianz Life Insurance Company Ltd (BALIC). The landmark transaction, valued at ₹24,180 crore, brings to an end a partnership between the Indian conglomerate and the German insurer that spanned 24 years.

The financial terms of the deal entail Bajaj Finserv paying ₹13,780 crore for Allianz’s stake in BAGIC and ₹10,400 crore for its holding in BALIC. This acquisition will elevate the Bajaj Group’s ownership in both insurance entities from the existing 74% to a full 100%.

The execution of the share purchase agreements (SPAs) marks the culmination of what Bajaj Finserv described as “constructive and amicable discussions” aimed at ensuring a seamless transfer of Allianz’s stake. The 24-year-old joint venture agreements will be terminated following the completion of the first tranche of the acquisition, which involves at least 6.1% of the stake, and the subsequent reclassification of Allianz from a promoter to an investor.

The acquisition will be executed through a distribution of stake purchases within the Bajaj Group. Bajaj Finserv Ltd will acquire approximately 1.01% in each company, while Bajaj Holdings and Investment Ltd will pick up around 19.95%, and Jamnalal Sons Pvt. Ltd. will secure about 5.04%, collectively accounting for the full 26% stake in both BAGIC and BALIC. Post-acquisition, Bajaj Finserv’s direct stake in both insurance companies will stand at 75.01%.

Regulatory approvals are a prerequisite for the completion of this transaction, including nods from the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (IRDAI).

Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, acknowledged the strong foundations laid by the joint ventures, noting a combined premium exceeding ₹40,000 crore and robust solvency margins. He expressed confidence that the single ownership structure will be a significant driver of value for the group’s stakeholders. Bajaj Finserv stated that the acquisition is a “significant milestone” in its strategy to advance next-generation insurance solutions, leveraging new technologies to serve Indian consumers across various geographies.

For Allianz, the decision to divest its stake follows “constructive and amicable discussions” with Bajaj Finserv. Looking ahead, Allianz indicated that India remains a key growth market and that the company will explore new opportunities to strengthen its position, potentially as an independent operator, especially with the anticipated passage of legislation allowing 100% foreign direct investment (FDI) in the insurance sector.

Both Bajaj and Allianz have committed to ensuring a smooth transition, minimising any impact on policyholders, intermediaries, and other stakeholders. Agreements have also been established to maintain continuity in reinsurance and other essential services during the transition period. While the transaction is expected to take several months to close, it signifies a pivotal shift in the Indian insurance landscape, with the Bajaj Group poised to take full control of its insurance operations and Allianz charting a potentially new course in the market.

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