Zurich Insurance Company will invest a sum of around Rs 4,051 crore or $500 million to acquire a 51 per cent stake in Kotak General Insurance. The investment will take place through a combination of fresh growth capital and share purchase. The company will also acquire an additional stake of 19 per cent within a period of three years from its initial acquisition, Kotak Mahindra Bank said in an exchange filing.
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The proposed transaction has valued Kotak General Insurance at around Rs 7,943 crore on a post money valuation. “Once Zurich acquires the 51 per cent shareholding in Kotak General Insurance, it will cease to be a subsidiary of the Bank,” the filing further said.
The transition is subject to customary conditions precedent including regulatory approvals from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Competition Commission of India (CCI).
Commenting on the announcement, Kotak Mahindra Bank MD and CEO Dipak Gupta said that the combined expertise of the two brands will be significant in providing innovative solutions to meet evolving needs of our customers.
“The alliance brings together two trusted and respected brands. The combined expertise and resources of the respective firms will enable us to provide innovative solutions to meet the evolving needs of our customers.
Kotak Mahindra Group’s pan-India ‘phygital’ distribution presence and Zurich’s distinct global capabilities in digital assets, B2B and B2C formats has potential to create a transformational ‘digical’ impact for the Kotak General Insurance franchise delivering innovation efficiently and rapidly in the Indian general insurance space,” Gupta said.
Kotak General Insurance is a fully-owned subsidiary of the Kotak Mahindra Bank Limited. The general insurance company offers non-life insurance products like motor, health, home, fire, marine, and liability insurances.
In November 2015, Kotak General Insurance received the license to start the business. Since then, the company has a national footprint of 25 branches spread across the country and has 1,339 employees as of December 2022.
Headquartered in Switzerland, Zurich Insurance Company is a subsidiary of the Zurich Insurance Group Limited. Zurich Insurance Group Limited is a leading multi-line insurer active in 200 countries and territories. Zurich Insurance Group Limited is listed on the SIX Swiss Exchange.
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Meanwhile, shares of Kotak Mahindra Bank are up 1.80 per cent to trade at 1,755.40 apiece at the BSE.
