Zurich Insurance to take over 70% stake in Kotak General for Rs 5,560 cr; regulatory approvals awaited

Kotak Mahindra Bank has said that Zurich Insurance Company will take over a 70 per cent stake in Kotak General Insurance Company Limited for Rs 5,560 crore in a single tranche. The deal was announced in 2023. Earlier, Zurich Insurance had said it would acquire 51 per cent through a combination of capital infusion and share purchase worth Rs 4,051 crore and a remaining 19 per cent over a period of three years. 

The proposed 70 per cent acquisition would be subject to fulfilment of customary conditions precedent, including the receipt of regulatory approvals from the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (IRDAI), Kotak Mahindra Bank said.

Zurich’s investment is the single largest investment by a global strategic insurer in a non-life insurance entity in India. The companies had then said that it would help combine the Kotak Group’s pan-India ‘phygital’ distribution presence and Zurich’s distinct global capabilities in digital assets, B2B and B2C formats to help the non-life insurer grow rapidly.

Earlier this month, the Competition Commission of India (CCI) said that it had approved the acquisition of a 70 per cent stake in Kotak Mahindra General Insurance Company by Zurich Insurance Company. Kotak Mahindra General Insurance Company is a 100 per cent subsidiary of Kotak Mahindra Bank.

"We refer to our disclosure dated November 2, 2023 in respect of the proposed acquisition of the shares of Kotak Mahindra General Insurance Company Limited by Zurich Insurance Company Ltd, by way of initial acquisition of 51 per cent of the share capital through a combination of capital infusion and share purchase, followed by a subsequent acquisition of additional stake of 19 per cent within a period of three years from the initial acquisition to take Zurich’s shareholding to 70 per cent of the share capital of Kotak General," said Kotak Mahindra Bank in a regulatory filing on Friday.

"The parties to the aforesaid transaction, viz., the Bank, Zurich and Kotak General have mutually agreed that Zurich will acquire 70 per cent stake in Kotak General by way of a combination of primary and secondary acquisitions in a single tranche, for a total consideration of approximately ₹5,560 crore, instead of the proposal announced in our earlier disclosure," added Kotak Mahindra Bank.