Competition Commission of India has approved the transfer of shares from existing shareholders of MetLife India Insurance to Punjab National Bank.
MetLife India is a joint venture comprising, among others, J&K Bank, M. Pallonji Group, the US-based MetLife International, IGE India, and Chintalapati Holdings.
MetLife International holds a 26 per cent stake — the maximum foreign direct investment allowed in the insurance sector — and Indian shareholders own the remaining 74 per cent. It is engaged in the business of distribution of life insurance products.
The proposed combination relates to the acquisition of 60 crore equity shares in MetLife by PNB pursuant to which PNB would hold 30 per cent of the equity capital of MetLife.
“It is observed that the businesses currently offered by PNB and MetLife are not similar, identical or substitutable with each other.
“Although PNB provides services to MetLife as a distribution agent, the share of MetLife in the business of life insurance is relatively insignificant and is not likely to raise any adverse effect on competition in India,” CCI said in an order.
In October, Insurance Regulatory and Development Authority had approved the share transfer agreement.
The insurance regulator, after discussing with a consultative committee, has directed MetLife to desist from allotting any further shares to IGE India Ltd, enhance capital to strengthen solvency position by March 31, 2013, and comply with IRDA regulations on bancassurance and corporate agency. Faridabad Investment Co is a shareholder in MetLife Insurance, which later merged with IGE India.