Kotak buys out Old Mutual stake
Kotak Mahindra Bank has agreed to buy out its UK-based partner Old Mutual’s entire 26 percent stake in its life insurance arm for INR1,292.7 crore (USD201.2 million).
“In line with its philosophy to deepen and expand in Indian financial services, KMB has entered into an agreement to purchase the entire 26 percent equity stake held by Old Mutual in Kotak Mahindra Old Mutual Life Insurance (Kotak Life) for a consideration of INR1,292.7 crore,” the private sector lender said in a statement.
On completion of the deal, which is subject to regulatory and other approvals, Kotak Mahindra Group will hold 100 percent equity in Kotak Life. The transaction is likely to be completed in the next few months. Formed in 2001, Kotak owned 74 percent stake in the life insurance joint venture while the remaining portion was with Old Mutual. In a separate statement, Old Mutual said, it will use the proceeds from the transaction for “general corporate purposes”.
Kotak Mahindra Old Mutual Life, which collected a total first-year premium of INR2,849.74 crore during the financial year ended 31 March, is ranked sixth among 24 life insurers in the industry in terms of premium collections. As on 31 March, Kotak Life’s net-worth was INR1,825 crore. Last month, Chinese conglomerate HNA Group Co. agreed to buy a 25 percent stake in Old Mutual Plc’s US asset management unit for about USD446 million.