Ageas Federal Life Insurance becomes first life insurer with foreign partner as majority stakeholder | The Financial Express

Ageas Federal Life Insurance becomes first life insurer with foreign partner as majority stakeholder

After the acquisition of the additional 25% stake, Ageas’ shareholding in the JV rose to 74% from the earlier-held 49%. Federal Bank continues to hold a 26% stake in the life insurer, while IDBI Bank exited as a shareholder.

Ageas Federal Life Insurance becomes first life insurer with foreign partner as majority stakeholder
Ageas has acquired the additional 25% stake of IDBI Bank in Ageas Federal Life Insurance for a total cash consideration of Rs 580 crore.

Ageas Federal Life Insurance (AFLI) on Thursday said it has become the first life insurance company in India to have a 74% stake held by a foreign partner after Belgium-based Ageas Insurance International completed the acquisition of the 25% stake in the life insurance joint venture (JV) from IDBI Bank.

Ageas has acquired the additional 25% stake of IDBI Bank in Ageas Federal Life Insurance for a total cash consideration of Rs 580 crore.

After the acquisition of the additional 25% stake, Ageas’ shareholding in the JV rose to 74% from the earlier-held 49%. Federal Bank continues to hold a 26% stake in the life insurer, while IDBI Bank exited as a shareholder.

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IDBI Bank had entered into a share purchase agreement (SPA) to sell its entire stake of 200 million equity shares in AFLI to Ageas Insurance International NV (Ageas). “IDBI Bank has completed the sale transaction of its entire stake of 20,00,00,000 equity shares in AFLI pursuant to the receipt of the requisite regulatory approvals. Pursuant to this sale, IDBI Bank’s shareholding in AFLI now stands at NIL,” the bank informed in a stock exchange filing.

“Ageas acquires the additional 25% stake for a total cash consideration of Rs 580 crore (EUR 73 million),” Ageas said in a release. Founded in 2007, AFLI recorded 10 consecutive years of profit since it first declared a profit in FY13. Its total premium rose by 13% to Rs 2,207 crore in FY22 driven by a 27% rise in individual new business premium and a 5% rise in renewal premium. It declared a net profit of Rs 94 crore in FY22.

Speaking on the shareholding change, Vighnesh Shahane, MD & CEO of Ageas Federal Life Insurance, said: “Further to the announcement by our finance minister in the Union Budget 2021 to increase the permissible FDI limit from 49% to 74% in insurance companies, we are proud to become the first life insurance company in the country to have 74% stake held by our foreign shareholder, Ageas.”

Despite the various challenges due to the pandemic, as well as the prior uncertainty around the stake sale, the company consistently delivered superior results, achieved new milestones, and declared profit for ten consecutive years, Shahane said. “With the continuing support of our shareholders – Ageas and Federal Bank, we are confident that the next chapter of our transformative journey will bring even more success and growth for the organisation,” he added.

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