New Delhi: Canada's Sun Life Assurance Company Ltd (Sun Life) will raise its stake in Indian joint venture Birla Sun Life Insurance Company to 49 percent from 26 percent at an investment of Rs 1,664 crore.


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"Sun Life Financial (Sun Life) will increase its stake in the life insurance joint venture, Birla Sun Life Insurance (BSLI), from 26 percent to 49 percent at an investment of Rs 1,664 crore, subject to the requisite approvals," Aditya Birla Nuvo Ltd (ABNL) informed the BSE.


As per the share sale and purchase agreement, which was executed today, Sun Life will purchase an additional 23 percent stake in BSLI from ABNL.


ABNL will sell approximately 437 million equity shares constituting 23 percent of the issued and paid up equity share capital of BSLI.


"On completion of the transaction, Sun Life's stake in BSLI will increase from current 26 percent to 49 percent while ABNL will continue to hold the controlling stake at 51 percent. The 23 percent stake sale will fetch ABNL Rs 1,664 crore, valuing BSLI at Rs 7,235 crore," it added.


Commenting on the development, Aditya Birla Nuvo and BSLI Chairman Kumar Mangalam Birla said: "Financial services is one of our fastest growing businesses and is among our core businesses."


BSLI is a private life insurance player in India, with the new business premium market share of 7.9 percent as of September 30, 2015.


"Increasing our ownership position in BSLI...Is exactly on strategy and supports our aspirations for Sun Life Asia as one of our four pillars of growth," Sun Life Financial President and Chief Executive Officer Dean Connor said.


The transaction is expected to close by the end of 2015-16, subject to the customary closing conditions and the requisite statutory and regulatory approvals in India and Canada, it said.


A number of foreign players, including French insurance giant Axa, Standard Life and Japanese Nippon, have announced raising their shareholdings in their respective insurance JVs in India after the government allowed 49 percent FDI in the sector this year.


The Commerce Ministry in March had notified operationalisation of increased FDI limit of up to 49 percent in the insurance sector.