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ICICI Lombard And Bharti AXA Sign Definitive Agreements To Combine Their Non-Life Insurance Businesses

The proposed transaction provides a meaningful opportunity for ICICI Lombard to consolidate its market leading position in the non-life insurance sector, becoming the third largest non-life insurer.

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The Board of Directors of ICICI Lombard General Insurance Company Ltd. (“ICICI Lombard”) and Bharti AXA General Insurance Company Ltd. (“Bharti AXA”) at their respective meetings held today, approved entering into definitive agreements for demerger of Bharti AXA’s non-life insurance business into ICICI Lombard through a Scheme of Arrangement.

Based on 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 receive 2 shares of ICICI Lombard for every 115 shares of Bharti AXA held by them as on the date on which the Scheme of Arrangement is approved by the Board of Directors of ICICI Lombard and Bharti AXA.

The proposed transaction provides a meaningful opportunity for ICICI Lombard to consolidate its market leading position in the non-life insurance sector, becoming the third largest non-life insurer. The combined entity shall have a market share of ~ 8.7% on pro-forma basis. Through this proposed transaction, ICICI Lombard shall be able to augment its distribution strength with Bharti AXA’s existing distribution partnerships. The combined entity shall also benefit from continued partnerships with Bharti Enterprises, one of India’s leading business groups with diversified interests, and AXA, a large well-reputed global insurer.

The proposed transaction is expected to result in value creation for all stakeholders through meaningful revenue and operational synergies. Policyholders are also expected to gain from an enhanced product suite and deeper customer connect touch points. Employees of the combined business will also benefit via greater opportunities across functions and geographies.

The closing of the proposed transaction is subject to various conditions precedent, including regulatory approvals from the Insurance Regulatory and Development Authority of India, Competition Commission of India, The Securities and Exchange Board of India, Stock Exchanges, Reserve Bank of India, NCLT and approval of shareholders of both ICICI Lombard and Bharti AXA, amongst others. Upon obtaining all approvals, when the scheme becomes effective, the non-life insurance business will be demerged from Bharti AXA into ICICI Lombard.

Commenting on the announcement, Mr. Bhargav Dasgupta, MD & CEO of ICICI Lombard General Insurance said, “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. The company has a talented employee base with a strong cultural fit, and we look forward to welcoming them to the ICICI Lombard family. We would also like to reassure Bharti AXA’s policyholders and channel partners of seamless business continuity and maintaining highest standards of customer service.”

Mr. Rakesh Bharti Mittal, Chairman of Bharti AXA General Insurance said, “We are delighted that the partnership between Bharti and AXA has been successful in laying down a solid foundation in the domestic insurance landscape. 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.”

Transaction Advisors:

Ernst & Young LLP (EY) acted as the exclusive M&A advisor to ICICI Lombard.

AZB & Partners acted as the legal advisor to ICICI Lombard. Cyril Amarchand Mangaldas acted as legal advisor to Bharti and Talwar Thakore & Associates acted as legal advisor to AXA.

BDO Valuation Advisory LLP and MKSA & Associates recommended the share exchange ratio for the demerger of Bharti AXA into ICICI Lombard. Ernst & Young Merchant Banking Services LLP provided fairness opinion to the Board of ICICI Lombard.

About ICICI Lombard General Insurance:

ICICI Lombard General Insurance is one of the largest private sector non-life insurer in India based on gross direct premium income in fiscal 2020 (Source: IRDAI). The company offers customers a comprehensive and well-diversified range of products, including motor, health, fire, personal accident, marine, engineering andliability insurance, through multiple distribution channels. More details are available at www.icicilombard.com 

About Bharti AXA General Insurance:

Bharti AXA General Insurance is a joint venture between Bharti, one of India’s leading business groups with interests in telecom, agriculture business and retail, and AXA, one of the world’s leading insurance and asset management company .The joint venture company has a 51% stake from Bharti and 49% stake of AXA. The company has pan-India presence through its 152 branches and offers insurance solutions for motor and two- wheeler, health and critical illness, property and student, individual and family travel. More details are availableat www.bharti-axagi.co.in 

About AXA Group:

AXA Group is a worldwide leader in insurance and asset management, with 160,000 employees serving 108 million clients in 57 countries. In 2019, IFRS revenues amounted to Euro 103.53 billion and underlying earnings to Euro 6.45 billion. AXA had Euro 969.36 billion in assets under management as of December 31, 2019. Moredetails are available at www.axa.com/en/ 

About Bharti Enterprises:

Bharti Enterprises is one of India’s leading business groups with diversified interests in telecom, financial services, real estate, hospitality, agri and food. Bharti has been a pioneering force in the Indian telecom sector with many firsts and innovations to its credit. Bharti Airtel, the group's flagship company, is a leading global telecommunications company with operations in 18 countries across Asia and Africa. Airtel ranks amongst the top three mobile service providers globally in terms of subscribers. Bharti has JVs with AXA, a world leader in Life Insurance and General Insurance. The group has a JV – FieldFresh Foods – with Del Monte Pacific Ltd. that offers a range of food and beverage products under the Del Monte brand in India and select SAARC countries. Other business ventures of the group include: Bharti Infratel – a leading provider of telecom tower and related infrastructure in India; Bharti Realty – a wholly owned real estate company primarily focused on premium commercial real estate; SB Energy – a JV with SoftBank Group for Renewable Energy.