Subsequent to the board meet of ICICI Lombard held Friday, general insurance arm of ICICI group has announced its merger with Bharti AXA General Insurance Company. As per the exchange filing, the scheme of arrangement has been agreed upon for integrating the two businesses.
Also, in accordance with the share swap ratio suggested by independent valuers and thereon agreed by the boards of the respective companies', for every 115 shares of Bharti AXA, shareholders of Bharti AXA would get 2 shares of ICICI Lombard as on the date when the scheme of arrangement is approved by the board of two companies.
Pursuant to the merger, ICICI Lombard would be the third largest entity in the general insurance or non-life insurance space. Further, the deal would increase the company's market share to around 8.7 per cent precisely. "This is a landmark step in the journey of ICICI Lombard and we are confident that this transaction would be value accretive for our shareholders. We are excited by the capabilities and strengths that Bharti AXA will add to our franchise," said Bhargav Dasgupta, MD & CEO of ICICI Lombard General Insurance.
Bharti AXA General Insurance is a joint venture between Bharti Enterprises and AXA, a French company. In it, Bharti holds a higher stake of 51% while the remaining 49% is held by AXA. The company through its network of 152 branch offices offers such services as motor and two-wheeler , critical illness and health, property, student, individual, and family travel insurance offerings.
"Over the past few years, our business demonstrated consistent growth, forged productive partnerships and increased the distribution footprint significantly. We are confident that the proposed amalgamation of our business with ICICI Lombard will bring greater business synergies and create value for all stakeholders," said Rakesh Bharti Mittal, Chairman of Bharti AXA General Insurance.
For Q1FY21, ICICI Lombard General insurance company announced a spike in its net profit to Rs. 398 crore as against Rs.310 crore in the corresponding period a year ago. The company's GDPI or gross direct premiums income dropped 5.3% during the review period to Rs 3,302 crore in Q1 from Rs 3,487 crore in the same period last year.