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IAG announces sale of its interest in SBI General Insurance

18th October 2019 - Author: Luke Gallin

Insurance Australia Group Limited (IAG) has announced an agreement to sell the entirety of its 26% interest in its joint venture with the State Bank of India, SBI General Insurance Company, through two transactions.

iag logoThe transaction includes an agreement with Napean Opportunities LLP, which is part of Premji Invest, to acquire a 16.01% interest, and another agreement with an affiliate of Warburg Pincus LLC to acquire a 9.99% interest.

The transactions remain subject to regulatory processes and approvals, and are expected to complete during IAG’s financial year ending June 30th, 2020.

Total consideration amounts to more than AUD 640 million (USD 437 million) based on the current exchange rate. Once the transactions are completed, it’s expected to drive an increase in the insurer’s regulatory capital position of more than AUD 400 million (USD 273 million) and a net profit after tax of more than AUD 300 million (USD 275 million), which will be recognised in the firm’s full-year 2020 results.

“IAG has enjoyed a strong and successful relationship with the State Bank of India since establishing the SBI General joint venture in 2009. With our sharpened focus on our core territories of Australia and New Zealand, now is the right time for IAG to exit its investment in SBI General,” said IAG Managing Director and Chief Executive Officer (CEO), Peter Harmer.

RMS

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