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IAG agrees sale of stake in SBI to Warburg Pincus and Napean
Posted on Thursday, 17 October 2019 12:07
Warburg Pincus and Napean Opportunities, an affiliate of PremjiInvest, have agreed to pick up 26.0 per cent of SBI General Insurance from Insurance Australia Group (IAG) for over AUD 640.00 million (USD 431.57 million).

A potential disposal has been mandated since the start of the year when it was reported the Sydney-headquartered firm was looking to sell its interest in the joint venture it has with State Bank of India.

The target is a Mumbai-based general insurance services provider with a presence in 110 cities across the country and another 350 locations through satellite resources.

Under the terms of the agreement, Warburg Pincus will acquire around a 10 per cent stake, while Napean will pick up 16.0 per cent of SBI General, with the remainder to be owned by State Bank of India.

Subject to regulatory approvals, the deal is expected to complete within the year ending 30th June 2020.

Peter Harmer, chief executive of the vendor, said: “IAG has enjoyed a strong and successful relationship with the State Bank of India since establishing the SBI General joint venture in 2009.

“With our sharpened focus on our core territories of Australia and New Zealand, now is the right time for IAG to exit its investment in SBI General.”

The business said once the transaction is complete, its regulatory capital position of more than AUD 400.00 million and a net profit of over AUD 300.00 million, will be recognised in its fiscal 2020 financial results.

Warburg Pincus and Napean have beaten other interested suitors, which reportedly included Carlyle, GIC and ChrysCapital.

Insurance companies based in the Far East and Central Asia have been targeted in 210 deals announced in 2019 to date, according to Zephyr, the M&A database published by Bureau van Dijk.

The largest of these involves FWD Group Financial Services acquiring Thailand-based SCB Life Assurance for THB 92.70 billion (USD 3.05 billion).

Japan Post Insurance, CCB Life Insurance of China, Taiwan-headquartered Nan Shan Life Insurance and India’s SBI Life Insurance, among others, have also been targeted in the year so far.

© Zephus Ltd