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Kotak Mahindra Bank on Friday said it has inked an agreement to purchase the entire 26 per cent equity stake held by Old Mutual plc, UK (OM) in Kotak Mahindra Old Mutual Life Insurance for a consideration of ₹1,292.7 crore.
After the completion of the transaction, Kotak Mahindra Group will hold 100 per cent of the equity shareholding of Kotak Life.
This move comes in the backdrop of the private sector bank last month proposing to issue up to 6.2 crore equity shares aggregating to over ₹5,000 crore, to pursue consolidation opportunities in the Indian financial services space.
Kotak Life reported a 29 per cent increase in premium in FY2017 at ₹2,850 crore as against ₹2,210 crore in the previous year, according to IRDAI data.
Net consideration According to Old Mutual, the net consideration is expected to be approximately ₹1,170 crore. The transaction is subject to Indian regulatory approvals and is expected to be completed in the second half of 2017.
Old Mutual said it will use the proceeds from the transaction for general corporate purposes.
Old Mutual provides investment, savings, insurance and banking services to 19.4 million customers in Africa, the Americas, Asia and Europe.
Originating in South Africa in 1845, Old Mutual has been listed on the London and Johannesburg Stock Exchanges, among others, since 1999.
Kotak Mahindra Bank shares closed at ₹901.60 apiece, down 1.42 per cent over the previous close on the Bombay Stock Exchange.
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