Zurich Insurance gets CCI nod to acquire 70% stake in Kotak Mahindra General Insurance

Shares of Kotak Mahindra Bank surged 1.2% to ₹1,802.80 apiece on BSE after opening low at ₹1,798.55 following the Competition Commission of India (CCI)’s approval to Zurich Insurance Company to acquire stakes in Kotak Mahindra General Insurance Company Ltd (KMGIC). KMGIC is a wholly owned subsidiary of Kotak Mahindra Bank.

CCI has granted its approval for Zurich Insurance Company Ltd's acquisition of a 70% stake in KMGIC. Back in November of the previous year, Switzerland-based Zurich Insurance Group had agreed to acquire a 51% stake in KMGIC for approximately ₹4,051 crore, utilising a mix of fresh capital injection and share purchase. This transaction was hailed as the largest investment by a global strategic insurer in an Indian non-life insurance firm.

“The Acquirer is a wholly owned subsidiary of Zurich Insurance Group Ltd. (Zurich Insurance Group) The Acquirer is a leading multi-line insurer serving people and businesses in more than 200 countries and territories. The Acquirer as part of the Zurich group has about 60,000 employees and is headquartered in Zurich, Switzerland,” the release states.

The completion of the deal is anticipated by June 30, 2024, with Zurich Insurance aiming to increase its stake to 70% within three years after the initial acquisition. Upon acquiring the initial 51% stake, KMGIC will no longer be a subsidiary of Kotak Mahindra Bank, which presently holds full ownership of the general insurance company.

The proposed valuation of KMGIC stands at ₹7,943 crore ($955 million) post-transaction.

“CCI approves the acquisition of 70% stake in Kotak Mahindra General Insurance Company Limited by Zurich Insurance Company Ltd,” CCI posts via X, formerly Twitter.

Separately, the CCI has also greenlit another transaction involving the acquisition of 100% shareholding of Interise Investment Managers Limited by  the CPIH, AIL – II. and Ontario Inc.

“CPPIB India Private Holdings Inc. (CIPH) is a Canadian corporation and is an investment holding company which invests in a diversified portfolio of assets. CIPH is a wholly owned subsidiary of Canada Pension Plan Investment Board (CPPIB). Allianz Infrastructure Luxembourg II S.À R.L. (AIL – II) is an alternative investment fund based in Luxembourg,” the release states.

Additionally, the CCI has sanctioned the acquisition of certain shareholding in Shadowfax Technologies Private Limited by NewQuest Asia Fund IV (Singapore) Ltd.

“The proposed combination relates to the acquisition of certain shareholding in Shadowfax Technologies Private Limited (SFX/ Target) by NewQuest Asia Fund IV (Singapore) Pte. Ltd (TPG NQ/ Acquirer) from Eight Roads Investments Mauritius II Limited (Eight Roads) and certain other shareholders of SFX,” the release states.