On April 28, 2020, Private-sector lender Axis Bank Ltd would acquire an additional 29% stake in Max Life Insurance Company from Max Financial Services Limited (MFS). The deal will increase Axis Bank ‘s stake in Max Life to 30%.
However, the bank didn’t reveal the amount it is paying for the stake. But the bigger deal can be estimated at Rs 1,600 crore (about $209.43 million) which will be paid in two stages.Key Points:
i.At present, Max Financial Services holds a 72.5% stake in Max Life & Mitsui Sumitomo Insurance (MSI) holds a 25.5 % stake.
ii.Following the transaction, Max Life – will become a joint venture of Max Financial Services and Axis Bank. Of this, 70% stake will be held by Max Financial Services and 30% will be held by Axis Bank. The proposed deal also needs the approval of the banking and insurance regulator and the Competition Commission of India (CCI).
iii.The acquisition may be completed in 6-9 months & Post the deal, Max Financial Services and Axis Bank will get to nominate four and three directors respectively on the Max Life board.
iv.For the last nearly 10 years, there has been a good business relationship between Axis Bank and Max Life Insurance, which provides long-term savings and protection products to over 1.9 million customers. The total premium generated from both companies exceeded Rs 38,000 crore.
About Axis Bank Ltd:
Headquarters– Mumbai, Maharashtra
MD and CEO– Amitabh Chaudhry
Tagline– Badhti Ka naam Zindagi.
About Max Life Insurance Company:
Headquarters– New Delhi
Managing Director & Chief Executive Officer– Prashant Tripathy