Mumbai: Manipal Group will be acquiring a 16% stake in healthcare insurance provider Cigna TTK Health Insurance Co. Ltd for an undisclosed amount, the firms announced in a joint statement on Monday.

The deal marks Manipal’s entry into the insurance business and is expected to help Cigna TTK to expand its distribution network, leveraging the customer base of Manipal, which has interests in healthcare and education.

Once the deal is sealed, Manipal and TTK Group will jointly hold a 51% stake in the insurance venture. The balance will be held by Cigna Corporation.

“The new partnership will help Cigna TTK bridge the gap between healthcare delivery and healthcare financing, and provide for more comprehensive and affordable healthcare solutions. Cigna TTK will look to use Manipal’s expertise on the local markets and its experience in delivering healthcare to customers to improve its own services" said Prasun Sikdar, managing director, Cigna TTK. He, however, declined to comment on the financial details of the deal. However, a person close to the development said, the transaction values Cigna TTK at 530 crore.

The transaction has already received the approval from insurance regulator Insurance Regulatory and Development Authority.

The announcement comes at a time when the government has been increasing its focus on healthcare and social security. In the Union budget for 2018-19, the centre had introduced Ayushman Bharat National Health Protection Scheme, which will provide an annual insurance of up to 5 lakh per family, covering about 10 crore vulnerable households.

Mumbai-based Cigna TTK, a joint venture between Philadelphia, US-based Cigna and Indian conglomerate TTK has 19 branches and about 17,000 agents. The firm has a customer base of over 10 lakh and has a tie-up with over 7,200 hospitals across India.

“The two organisations are a good cultural fit. The combination of Cigna’s global expertise in health and wellness, its ability to offer customized solutions for the Indian market, and Manipal Group’s integrated healthcare expertise with multi-specialty hospital networks will create a true differentiation for healthcare in India," said Ranjan Pai, chairman, Manipal Education and Medical Group.

Earlier this year, Manipal Hospital Enterprises Ltd, backed by private equity firm TPG Capital, was looking to acquire the hospitals business of Fortis Healthcare Ltd. The deal, however, did not fructify. Manipal has a total capacity of about 2,900 beds.

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