The investment would be made through a combination of fresh growth capital and share purchase.
Zurich will also acquire an additional stake of 19% within a period of three years from its initial acquisition. Zurich’s investment represents the single largest investment by a global strategic insurer in an Indian non-life insurer, the private sector lender said.
“With Kotak Mahindra Group’s high-quality franchise and expertise in Indian financial services, and Zurich’s deep distribution experience and class-leading capabilities in retail and commercial insurance, we are confident this partnership can bring strong innovation, know-how, and excellent customer experiences to the Indian general insurance market,” said Tulsi Naidu, CEO Asia Pacific, Zurich Insurance Company.
Once Zurich acquires the 51% shareholding in the insurance company, it will cease to be a subsidiary of the bank. The proposed transaction values Kotak General Insurance at approximately Rs 7,943 crore on a post money valuation, subject to customary closing adjustments.
The deal includes infusion of fresh growth capital of up to about Rs 1,609 crore in Kotak General Insurance.
“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,” Kotak Mahindra Bank MD and CEO Dipak Gupta said.The deal is subject to customary conditions precedent including regulatory approvals from the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India, and the Competition Commission of India.
Following the announcement of the news, Kotak Bank shares rallied 2% to the day’s high of Rs 1,758 on BSE.
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