British health insurance company Bupa will acquire an additional 23% stake in Max Bupa Health Insurance from its Indian joint venture (JV) partner Max India, the latter said in a stock exchange filing.
UK’s Bupa will pay Analjit Singh-promoted Max India Rs 191 crore in an all-cash transaction. Max India’s board has approved the divestment and new agreements will come into force after receiving requisite regulatory clearances from the Foreign Investment Promotion Board and the Insurance Regulatory and Development Authority of India (Irdai).
“To further strengthen the relation with the JV partner in Max Bupa, the board of directors has decided to divest 23% stake in favour of UK’s Bupa,” the company stated in stock exchange filing. Max India’s shares closed at Rs 555.65 per share, down Rs 22.90 or 3.96%.
Max Bupa is a 74:26 joint venture between Max India and Bupa. After the deal, Max India’s holding in Max Bupa will decline to 51%, while Bupa’s holding will rise to 49%.
The UK health care group was the first foreign insurer to announce its intent to increase its stake to 49% in its Indian health insurance subsidiary after the government relaxed FDI participation rules for insurance companies.
Overall, this will be the fifth deal by a foreign partner in the Indian insurance space. In August, Standard Life had announced plans to buy an additional 9% stake in its Indian insurance venture HDFC Life to raise its ownership to 35%, valuing HDFC Life at Rs 18,951.4 crore.
In the same month, FIPB approved Tokio Marine’s plan to raise stake in its Indian JV partner Edelweiss Tokio Life Insurance to 49% from 26%. British insurer Aviva also announced its plan to raise stake in its Indian joint venture with Dabur Invest to 49%.
Canada-based insurance and investment company, Fairfax Financial Holdings promoted by Prem Watsa, last month announced it would buy an additional 9% stake of ICICI Lombard General Insurance from ICICI Bank. Fairfax will increase its ownership to nearly 35% stake in ICICI Lombard from 25.7%. The deal is expected to close in the first quarter of 2016.
Hale & hearty
* UK’s health insurer will shell out Rs 191 crore in an all-cash transaction for an additional 23% stake
* Max Bupa is a 74:26 JV between Max India and Bupa. Post deal, Max India stake in Max Bupa will decline to 51%
* Overall, this will be the fifth deal by a foreign partner in the Indian insurance space