Bajaj Group to Acquire Allianz Stake in Insurance JVs

New Delhi, Apr 30 (PTI) Bajaj Group has sought the Competition Commission of India's (CCI) approval to acquire a 26 per cent stake each in its insurance joint ventures Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance from its partner Allianz SE.

"The...combination relates to the proposed acquisition of 26 per cent paid-up equity share capital of BALIC (Bajaj Allianz Life Insurance Company Ltd) and BAGIC (Bajaj Allianz General Insurance Company) by BFS (Bajaj Finserv Ltd), BHIL (Bajaj Holdings & Investment Ltd), and Jamnalal Sons Pvt Ltd (JSPL) in tranches from Allianz SE," said a notice filed with the CCI on April 21.

BFS is engaged in the provision of financial services, including consumer and SME finance, housing finance, general insurance, life insurance, and mutual funds.

BHIL is a RBI-registered as a non-banking financial company - investment and credit company and BALIC and BAGIC are joint ventures between Bajaj Finserv and Allianz, where BFS currently holds 74 per cent stake each and the rest with Allianz SE.

Bajaj Group has also sought clearance from the competition watchdog for the proposed acquisition of 50 per cent paid-up equity share capital of BAFDL (Bajaj Allianz Financial Distributors Ltd) by BFS in a single tranche from Allianz, the notice said.

BAFDL is a 50:50 joint venture between BFS and Allianz.

"The proposed acquisition of full control of Bajaj Allianz Life Insurance (BALIC), Bajaj Allianz General Insurance (BAGIC) and Bajaj Allianz Financial Distributors (BAFDL) by the Bajaj group from Allianz will not impact market competition, the parties said.

The deal involves horizontal overlaps in general insurance distribution, vertical links in life and general insurance provision and distribution, and complementary ties in auto, healthcare, and travel services with insurance.

The parties argued that the insurance sector remains fragmented and competitive, with no significant market power held by them.

They also asserted no ability or incentive to stifle competition. Given this, they submitted that the market definitions may be left open, as the combination is unlikely to cause any adverse impact on competition.

Last month, financial services firm Bajaj Finserv announced that it has signed share purchase agreements for the acquisition of a 26 per cent stake owned by Allianz SE of Germany in its insurance businesses Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company.

The execution of the Share Purchase Agreements (SPAs) marks the end of a 24-year relationship and also the culmination of constructive and amicable discussions to ensure a seamless transfer of the stake of Allianz.

The acquisition of Allianz SE's stake will increase Bajaj Group's ownership in Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC) to 100 per cent from the current 74 per cent.

The agreed consideration for 26 per cent stake in BAGIC and BALIC is Rs 13,780 crore and Rs 10,400 crore, respectively, the company said.