Italian insurer Generali has announced new agreements to become the majority shareholder in both its Life and P&C joint ventures in India.
The company plans to acquire 25% of the shares of P&C business Future Generali India Insurance (FGII) and 16% of Life business Future Generali India Life (FGIL), bringing its total shareholdings in each unit to 74% and 68%, respectively.
The move follows an announcement by the Indian Government in 2021 that permits the increase of Foreign Direct Investment limit in the insurance sector from 49% to 74%.
Generali is the first player among international insurers to step-up to a majority stake in both its Indian insurance joint venture companies since the new foreign ownership cap came into effect.
The insurer has agreed to buy the FGII shares from owner Future Enterprises Limited for a consideration of €145 million, and to buy the FGIL shares held by Industrial Investment Trust Limited (IITL) for €26 million.
Generali noted that its stake in FGIL may increase further to 71% by the end of 2022, following further preferential allotment of shares.
“Increasing Generali’s stake in our Indian Life and P&C insurance businesses represents a further step ahead in our growth journey in this high potential market,” said Jaime Anchústegui Melgarejo, CEO International, Generali Group.
“With an expected double-digit annual growth rate, India’s insurance market offers considerable opportunities, and we look forward to deepening our presence in this geography, becoming Lifetime Partners to an increasing share of Indian customers.”
Rob Leonardi, Regional Officer, Generali Asia, also commented: “We’re excited that we are now able to consolidate our position in our Life and P&C insurance businesses, as it has always been our intention to increase our presence in India. Once the transactions are completed, we plan to do so in a way that will create more value for our more than 4 million customers, agents, partners and distributors.”
Citigroup and Alvarez & Marsal acted as financial advisors to Generali on the transactions.
