DEA Approves Swap of Mitsui Sumitomo’s Max Life Stake of 20.57% with  21.87%stake in Max Financial Services

On November 19, 2020 Department of Economic Affairs(DEA), Ministry of Finance(MoF) gives approval for a swap of 20.57% stake by Mitsui Sumitomo Insurance (MSI) Company Ltd that it holds in Max Life with a 21.87% stake in Max Financial Services Ltd(MFSL).

About Share Swap Transaction

i.MFSL’s 7,54,58,088 equity shares, i.e., 21.87%(21.9%) of the paid-up share capital will be issued and allotted to MSI.

ii.As part of the share swap transaction, Max life Insurance Company Ltd’s equity shares comprising 20.57%(20.6%)of the paid-up share capital that is held by MSI will be transferred to MFSL.

Stake Holding

i.Presently MFSL holds 72.5% stake in Max Life and MSI owns 25.5% stake.

ii.The share swap transaction will result in MFSL’s stake in Max Life increasing to 93.10%.

Note- Upon the  receipt of approval from Insurance Regulatory and Development Authority of India (IRDAI), the transaction will be completed.

What is Share Swap Transaction?

A share swap transaction is an agreement between two counterparties to exchange their equity-based asset on an exchange ratio under the circumstances of mergers, acquisitions, or takeovers

Key Info

Recently, Axis Bank Ltd along with its subsidiaries namely, Axis Capital Ltd and Axis Securities Ltd (together Axis Entities) has entered into revised agreements with MFS Ltd to acquire up to 19.002% of the equity share capital of Max Life Insurance Co Ltd (Revised Agreements), in accordance with existing laws and regulations.

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About Mitsui Sumitomo Insurance (MSI) Company Ltd:
President, Chief Executive Officer(CEO)– Noriyuki Hara
Head Office– Tokyo, Japan
Established– October 21, 1918

About Max Financial Services Ltd(MFSL) 
MFSL is a part of the Max Group and is the holding company for Max Life.
MD– Mr. Mohit Talwar(Vice Chairman of the Max Group)
Headquarters– New Delhi, India