In a stock exchange filing on Tuesday, Axis Bank said that its board has agreed to acquire 55.64 crore shares representing 29 percent stake in Max Life Insurance Company from Max Financial Services.
"We wish to inform you that the Board of Directors at its meeting held on Monday, 27th April 2020, has approved entering into an agreement with Max Financial Services Limited (MFSL) to acquire 29% stake in Max Life Insurance Company Limited. The Bank will acquire shares from Max Financial Services and will sign a Shareholders' Agreement and a Share Purchase Agreement in relation to the same," its statement said.
"The said transaction is subject to satisfaction of conditions precedent, including receipt of regulatory approvals from Reserve Bank of India, Insurance Regulatory and Development Authority of India and Competition Commission of India, among others," the private bank added.
The acquisition is expected to take 6-9 months to complete, the bank said.
"Upon the closing of the transaction, Axis Bank will have the right to nominate 3 (three) directors and MFSL will have the right to nominate 4 (four) directors on the Max Life Board. One nominee director of the Promoter group on the Board of MFSL shall be a person identified by Axis," it added.
Shares of Axis Bank rose over 5 percent to an intraday high of Rs 448.50 on BSE after the announcement. The private bank is scheduled to release its financial results for the March ended quarter on Tuesday.
Axis Bank currently holds a minority stake in the insurance company which is set to rise to 30 percent after the completion of the transaction.