Prudential (2378) announced on Sunday that it has agreed to acquire a 75 percent stake in Bharti Life Insurance Company as part of a strategic repositioning of its India operations.
The transaction is for an initial cash consideration of 35 billion rupees (HK$2.84 billion). Prudential stated that completion of the transaction remains subject to receipt of regulatory approvals and the satisfaction of other conditions.
Bharti Life Insurance Company is a prominent Indian life insurer from Bharti Life Ventures Pvt Ltd and 360 ONE Asset Management.
Upon completion, Prudential's Indian operations will comprise majority-owned Bharti Life Insurance Company and Prudential HCL Health Insurance, along with minority shareholdings in two listed entities, namely 35 percent in ICICI Prudential Asset Management Company and 22 percent in ICICI Prudential Life Insurance Company.
The regulatory approvals for this transaction are expected to require Prudential to reduce its stake in ICICIPru Life to below 10 percent. Part of the proceeds from the reduction of its stake in ICICIPru Life is expected to be used to support the future growth of the business, with the remaining capital to be included in Prudential’s free surplus.
In addition, there is a potential additional consideration of up to 7 billion rupees. Also, as part of this transaction, Bharti Life will explore establishing strategic distribution partnerships with Bharti Airtel and 360 ONE.
Prudential's chief executive, Anil Wadhwani, said that India is a strategically significant market full of growth opportunities for Prudential. By acquiring a controlling stake in Bharti Life, Prudential will be able to combine its nearly 180 years of global insurance expertise with Bharti’s strong local presence to meet the savings and protection needs of Indian consumers. At the same time, through this acquisition, the company aims to make a further contribution to the Viksit Bharat initiative.
