ICICI Lombard to become 3rd largest non-life insurer; announces merger with Bharti Axa General Insurance

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August 22, 2020 11:18 AM

The shareholders of Bharti AXA shall get two shares of ICICI Lombard for every 115 shares of Bharti AXA held by them as on the date when the scheme of arrangement is approved by the board of two companies.

The merged business will have a market share of around 8.7 per cent on a Pro-forma basis.

General insurance companies ICICI Lombard General Insurance Company and Bharti AXA General Insurance Company have announced the merger of their businesses. Following the ICICI Lombard’s board meeting on Friday, a scheme of arrangement was approved to combine the two ventures, according to the filing with exchanges. As per the share exchange ratio recommended by independent valuers and accepted by the respective boards of ICICI Lombard and Bharti AXA, the shareholders of Bharti AXA shall get two shares of ICICI Lombard for every 115 shares of Bharti AXA held by them as on the date when the scheme of arrangement is approved by the board of two companies.

The deal would help ICICI Lombard become the third-largest non-life insurer, the company said in a release. The merged business will have a market share of around 8.7 per cent on a Pro-forma basis. “This is a landmark step in the journey of ICICI Lombard and we are confident that this transaction would be value accretive for our shareholders. We are excited by the capabilities and strengths that Bharti AXA will add to our franchise,” said Bhargav Dasgupta, MD & CEO of ICICI Lombard General Insurance.

Bharti AXA General Insurance is currently a joint venture business between Bharti Enterprises and France-based Axa wherein the former has 51 per cent while Axa owns 49 per cent stake. The JV has 152 branches in India offering insurances for motor and two-wheeler, health and critical illness, property and student, individual, and family travel.

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“Over the past few years, our business demonstrated consistent growth, forged productive partnerships and increased the distribution footprint significantly. We are confident that the proposed amalgamation of our business with ICICI Lombard will bring greater business synergies and create value for all stakeholders,” said Rakesh Bharti Mittal, Chairman of Bharti AXA General Insurance.

ICICI Lombard General had reported Rs 398 crore net profit for Q1 FY21 vis-à-vis Rs 310 crore in the year-ago period, Financial Express had reported last month. Its Gross direct premiums income (GDPI) declined 5.3 per cent in Q1 to Rs 3,302 crore in Q1 from Rs 3,487 crore in the same period last year. The company in a statement had said that the impact was mainly due to the Covid-19 pandemic. However, its underwriting profit was Rs 38.16 crore in comparison to an underwriting loss of Rs 44.93 crore for the June 2019 quarter.

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