Kotak Mahindra Bank announced in a press release that it is buying out UK partner Old Mutual’s entire stake in its life insurance arm for Rs1,292.7 crore.
The sale will end Old Mutual’s JV with Kotak Mahindra and the latter would then hold 100% equity stake in Kotak Life.
Commenting on the proposed transaction, Gaurang Shah, President, Asset Management, Insurance & International Business, at Kotak Mahindra Bank, said, “Kotak Mahindra Group and Old Mutual have enjoyed a fruitful relationship over the past 16 years and built a successful and trusted brand in the life insurance industry in India. Old Mutual has been a valued business partner.”
The life insurance joint venture was formed in 2001 with Kotak Mahindra owning 74% while the remaining was with Old Mutual.
“India is in an exciting phase of its economic journey and the financial services sector, especially the insurance sector, is poised for significant growth. Kotak Life will continue to leverage this opportunity through its growing network of agency and other channel partners including Kotak Mahindra Bank and its Group entities,” Gaurang added.
The transaction, subject to Indian regulatory approvals, is expected to complete in the second half of 2017.
Kotak Old Mutual Life Insurance managed AUM of Rs16,800 lakh crore and recorded net profit of Rs251 crore, as on March 2016.