Max Life to be 70:30 JV

Axis Bank Limited (Axis Bank) and Max Financial Services Limited (MFS) recently signed definitive agreements to become joint venture partners in Max Life Insurance Company Limited (Max Life).  Axis Bank will hold 30 percent stake in Max Life post transaction closure. The joint venture arrangement will significantly improve Max Life’s competitive position vis a vis its competitors, including the other large bank owned private life insurers.

Max Financial Services presently holds a 72.5 percent stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5 percent stake. Axis Bank also has a minor stake in the life insurer.

The aforesaid transaction with Axis Bank follows the ongoing swapping by MSI of 20.6 percent stake that it holds in Max Life with a 21.9 percent stake in MFS. MFS also plans to purchase MSI’s balance stake in Max Life. Post completion of the series of transactions, Max Life will become a 70:30 joint-venture between MFS and Axis Bank. The proposed transactions are subject to approval of requisite corporate and regulatory authorities (including IRDAI, RBI and CCI).

Announcing the transaction, Amitabh Chaudhry, MD and CEO, Axis Bank, said, “We continue to believe in the long term prospects of India’s under-penetrated life insurance space, current environment notwithstanding. We see this joint venture creating immense value for our stakeholders given our long standing, high performing partnership with Max Life. We believe this transaction will allow us to deepen our working relationship leading to better integrated teams and infrastructure and a superior alignment in our approach.”