New Delhi: The Netherlands-based ING on Wednesday said it will exit ING Vysya Life Insurance Company by selling its 26 percent stake to domestic partner Exide Industries, the second foreign insurer withdrawing from India this fiscal.
Exide Industries, which already holds 50 percent stake in the insurance company, will also buy the remaining 24 percent from two other promoters - Hemendra Kothari Group and Enam Group.
Post acquisition, the leading batteries producer will become 100 percent owner of the life insurance company.
Exide proposes to pay about Rs 550 crore for 50 percent stake, thereby valuing the ING Vysya Life at about Rs 1,100 crore.
ING's exit from the Indian life insurance joint venture is part of the previously announced divestment of ING's Asian Insurance and Investment Management businesses, the Dutch banking and insurance company said in a statement.
As part of its restructuring process, ING Group last year sold the insurance business in Malaysia to AIA Group.
Exide Industries said: "The company has in-principle decided to acquire the remaining 50 percent of the equity capital of ING Vysya Life (26 percent from ING Group, 16.32 percent from the Hemendra Kothari Group and 7.68 percent from the Enam Group) for an aggregate consideration of Rs 550 crore approximately."
The deal is subject to regulatory approvals, ING said, adding that the transaction is expected to close in the first half of 2013.
In June, US-based New York Life exited from the Indian life insurance business venture by selling 26 percent stake at Rs 2,731 crore to Mitsui Sumitomo Insurance of Japan.
Exide further said that it will look for a new foreign partner for its life insurance company.
"Post such acquisition Exide has in principle decided to identify and induct a new international player in the life insurance genre to infuse fresh equity into IVL for the company's expansion plans," it said.
ING said the transaction is not expected to have a material impact on the Group's results.
"Today's agreement does not impact ING Vysya Bank, a publicly listed Indian bank in which ING has a 44 percent stake, nor ING's fund management business in the country," it said.
Headquartered in Bangalore, ING Vysya Life Insurance has over a decade of experience serving more than one million customers in over 200 cities in India.
According to reports Future Group and DLF Group are also planning to exit from its life insurance business.
Of the 24 life insurance players in the country, only two companies -- Life Insurance Corporation (LIC) and Sahara India Life Insurance Co are running the business without foreign partners.