New Delhi, October 17: Sydney-headquartered Insurance Australia Group (IAG) has announced to sell the whole of its 26 per cent stake in State Bank of India General Insurance (SBIG). IAG has signed a definitive agreement with Azim Premji-led Premji Invest and American private equity group Warburg Pincus Group to sell 16.01 per cent and 9.99 per cent stake, respectively, the State Bank of India (SBI) on Thursday said.
Founded in 2009, SBI General, which offers insurance products for retail, commercial and SME segments, is a joint venture company between SBI and IAG who own 70 per cent and 26 per cent stakes, respectively. Its profit after tax dropped to Rs 75 crore in Q1 FY20.
Upon completion of the transaction, the bank will continue to hold 70 per cent, Napean Opportunities LLP (an affiliate of Premji Invest) will hold 16.01 per cent, WP Honey Wheat Investment will hold 9.99 per cent, PI Opportunities Fund-1 will hold 2.35 per cent, and Axis New Opportunities AIF–I will hold 1.65 per cent of the share capital of the company.
“The transactions, which are subject to regulatory processes and approvals, are expected to complete during IAG’s financial year ending 30 June 2020,” IAG said in a separate statement. It added that the total consideration amounts to over $640 million based on the current exchange rate.
“IAG has enjoyed a strong and successful relationship with the State Bank of India since establishing the SBIG joint venture in 2009. With our sharpened focus on our core territories of Australia and New Zealand, now is the right time for IAG to exit its investment in SBIG,” IAG’s statement cited CEO, Peter Harmer, as saying.