Generali to Raise Stake in Indian P/C Insurance Joint Venture to 74%

Generali has agreed to become the majority shareholder in both its property/casualty and life joint ventures in India.

For the P/C business, Generali has agreed to acquire 25% of the shares of Future Generali India Insurance (FGII) from Future Enterprises Ltd. for approximately €145 million (US$164 million).

After closing, Generali will have a stake of around 74% in FGII, which Generali describes as one of the fastest growing general insurance companies in the market with a diversified product and distributor portfolio. As of March 2021 (fiscal year end for Indian insurance companies), FGII reported around €450 million ($507.7 million) of premiums.

Regarding the life business, Generali said an agreement has been signed to acquire the entire stake (around 16%) held by Industrial Investment Trust Ltd. (IITL) in Future Generali India Life (FGIL) for around €26 million ($29.3 million). FGIL reported around €150 million ($169.2 million) of gross written premiums as of March 2021.

In addition, Generali will subscribe to a preferential allotment of shares in FGIL – around €21 million ($23.7 million). As a result, following the closing of the transaction and completion of the preferential allotment, Generali will hold a stake of around 68% in FGIL, which may increase further to 71% by the end of 2022.

Both transactions are subject to regulatory approval. The Indian government last year increased the limit of foreign direct investment in the insurance sector to 74% from 49%.

Future Enterprises said it has received offers from potential buyers for its remaining 24.91% interest in Future Generali India Insurance.

Generali said it is the first player among international insurers to increase majority stakes in both its Indian insurance joint venture companies since the new foreign ownership cap came into effect.

“Increasing Generali’s stake in our Indian Life and P&C insurance businesses represents a further step ahead in our growth journey in this high potential market,” commented Jaime Anchústegui Melgarejo, CEO International, Generali Group. “With an expected double-digit annual growth rate, India’s insurance market offers considerable opportunities, and we look forward to deepening our presence in this geography, becoming lifetime partners to an increasing share of Indian customers.”

“We’re excited that we are now able to consolidate our position in our Life and P&C insurance businesses, as it has always been our intention to increase our presence in India,” said Rob Leonardi, regional officer, Generali Asia.

“Once the transactions are completed, we plan to do so in a way that will create more value for our more than 4 million customers, agents, partners and distributors,” he added.

Citigroup and Alvarez & Marsal acted as financial advisers to Generali on the transactions.

Source: Generali and Future Enterprises Ltd.

Topics Mergers & Acquisitions Property Casualty