The Bajaj Group has sought clearance from the Competition Commission of India to acquire its partner Allianz SE's stakes in its insurance joint ventures Bajaj Allianz General Insurance Co. and Bajaj Allianz Life Insurance Co.
The transaction entails the proposed acquisition of 26% paid-up equity share capital of Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance by Bajaj Finserv Ltd., Bajaj Holdings & Investment Ltd. and Jamnalal Sons Pvt. in tranches from Allianz SE, according to a notice filed with the CCI on April 21.
Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance are joint ventures between Bajaj Finserv and Allianz.
In both the ventures, Bajaj Finserv with 74% is the majority stakeholder while Allianz SE holds the remaining equity.
The acquisition of Allianz SE's stake will increase Bajaj Group's ownership in Bajaj Allianz General Insurance Co. and Bajaj Allianz Life Insurance Co. to 100% from the current 74%.
Bajaj Finserv is engaged in the provision of financial services, including consumer and SME finance, housing finance, general insurance, life insurance, and mutual funds.
Bajaj Holdings & Investment is an investment and credit company registered with the RBI as a non-banking financial company.
Bajaj Group has also sought clearance from the competition watchdog for the proposed acquisition of 50% paid-up equity share capital of 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.
Both the parties have 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% stake owned by Allianz SE of Germany in its insurance businesses Bajaj Allianz General Insurance Co. and Bajaj Allianz Life Insurance Co.
The execution of the share purchase agreements 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 agreed consideration for the 26% stakes in BAGIC and BALIC is Rs 13,780 crore and Rs 10,400 crore, respectively, the company said.
(With PTI inputs)
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