InvestorQ : How do you see the merger of ICICI and Bharti Insurance businesses benefiting investors?
Dawn Cherian made post

How do you see the merger of ICICI and Bharti Insurance businesses benefiting investors?

Answer
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Mitali Bhutta answered.
2 months ago


ICICI Lombard, the general insurance arm of the ICICI group, and Bharti AXA General Insurance have entered into an agreement to merge their respective businesses into a single entity. Bharti will demerge its general insurance unit into ICICI Lombard.

Under the terms of proposed scheme of arrangement, shareholders of Bharti AXA will receive 2 shares of ICICI Lombard for every 115 shares held by them. Once they are merged, they will command a market share of 8.7% in the non-life business.

While companies have signed definitive agreements, the merger is still subject to IRDA approvals. In addition, the deal will also have to be approved by CCI, SEBI, RBI, NCLT as well as the shareholders of both the companies involved in the transaction.

Markets are confident that the merger will bring greater business synergies and value creation for the shareholders. ICICI Lombard will also be looking to grow its corporate franchise sharply with the help of this deal with Bharti AXA.

In FY21, till date, Bharti AXA collected gross premiums of Rs.811 crore while ICICI Lombard has underwritten premiums to the tune of Rs.4391 crore. ICICI Lombard remains the third largest non-life player with the top-2 being state owned companies.