Sun Life Financial to increase its stake in Birla Sun Life Insurance from 26% to 49%
The higher stake is in line with Sun Life’s objective of expanding its presence in markets with strong growth opportunities
Mumbai: Sun Life Financial Inc. of Canada will increase its stake in Birla Sun Life Insurance Co. Ltd, a joint venture with Aditya Birla Nuvo Ltd, from 26% to 49% by spending Rs.1,664 crore to buy additional shares from the Indian partner.
Sun Life said increasing the stake is in line with its objective of expanding its presence in markets with strong growth opportunities.
“Increasing our ownership position in Birla Sun Life Insurance, one of India’s leading private life insurers, in partnership with a well-respected partner in Aditya Birla Group, in the world’s second-most populous country with strong growth prospects, is exactly on strategy and supports our aspirations for Sun Life Asia as one of our four pillars of growth,” said Dean Connor, president and chief executive officer, Sun Life.
The transaction is expected to close by the end of the first quarter of 2016, subject to regulatory approvals and customary closing conditions.
According to data from Thomson Reuters, at least 19 deals had been announced in the insurance sector between March and November.
Foreign investors started ploughing in capital in their Indian counterparts after they were allowed to increase their stake from 26% to 49%.
Not all companies have disclosed deal values. A Mint analysis of deals where value has been announced suggests that they add up to more than Rs.10,000 crore. The largest transaction was Japan-based Nippon Life Insurance Co. increasing its stake in Reliance Life Insurance to 49% from 26% for Rs.2,265 crore.
“In Sun Life, our joint venture partner, we find many synergies that are reflective of their belief and commitment towards the Indian market. Both Sun Life and Aditya Birla Nuvo have closely partnered in building this business to its current scale, investing heavily in both capital and resources. I am confident this move will only strengthen our longstanding partnership and help realize our vision of being a top three private life insurer in India,” said Kumar Mangalam Birla, chairman, Aditya Birla Nuvo.
Birla Sun Life started business in 2001 and has a customer base of 1.6 million individual policyholders and a distribution reach across 418 cities through a network of more than 55,000 advisers in 489 branches.
Anirudh Laskar contributed to this story.
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