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Future Enterprises Ltd has agreed to sell a 25 per cent stake in its general insurance joint venture – Future Generali India Insurance (FGIICL) -- to its Joint Venture partner, Generali Participations Netherlands NV. The transaction is for a cash consideration of ₹1,252.96 crore, along with an additional consideration that is linked to the date of the closing of the transaction, it said in a statement on Thursday. “Generali has also acquired an option to buy out the Company’s remaining interest in FGIICL, directly or through a nominee, at an agreed valuation subject to applicable regulatory approvals,” it further said, adding that the transaction is subject to regulatory approvals.
In a separate statement, Generali said the move is in line with its strategy to strengthen its presence in fast-growing markets. “Following the closing of the transaction and completion of the preferential allotment, Generali will hold a stake of around 68 per cent in FGIICL, which may increase further to 71 per cent by the end of 2022, following further preferential allotment of shares,” it said. FEL said it has received offers from potential buyers for its remaining 24.91 per cent interest in the general insurer.
Mulls divesting stake in life insurance biz
It is also exploring options to sell its 33.3 per cent interest in the life insurance JV. It expects to complete the exit of its holding in the two insurance companies in a time-bound manner to meet its commitment under the One Time Restructuring Plan implemented under the August 6, 2020 circular of the Reserve Bank of India. Generali had previously received approval from the Competition Commission of India to purchase a 16 per cent stake held by Industrial Investment Trust in the life insurance JV -- Future Generali India Life Insurance Company and has agreed to invest up to ₹330 crore in tranches in FGILICL to fund its growth plans. Following these transactions, Generali will acquire a majority stake and control in both the insurance companies. Future Generali India Insurance was incorporated in September 2007. It registered a 5.47 per cent growth in gross premium underwritten to ₹2,906.01 crore between April and December 2021 compared to ₹2,755.24 crore a year ago.
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