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Belgian multinational insurer Ageas will acquire a 40% stake in India’s Royal Sundaram General Insurance (RSGI) for €186 million (US$210.2 million).
The transaction is subject to the approval of regulatory authorities, and is expected to close in the first half of 2019. Once the deal is completed, Ageas will hold 40% of RSGI’s shares, with Sundaram Finance holding 50%, and the remaining 10% distributed among various other shareholders.
According to Ageas, the acquisition fits its three-year strategic plan dubbed Connect21, in which the firm will expand its activities in fast-growing markets in which it already operates, focussing on general insurance
RSGI is among the top 10 privately owned general insurers in India, focusing on motor insurance and health insurance. It has a network of over 5,600 agents, 700 branches, and several distribution partnerships with banks and online portals. In 2018, the insurer posted a net profit of €10 million (US$11.3 million), with a 55% growth in net profit between 2015 and 2018.
“Partnering with Sundaram Finance, a well-established company with a vast knowledge of the Indian insurance market, offers us a great opportunity to benefit from the potential of what is one of the world’s largest economies with an insurance industry that is expected to grow significantly in the coming years,” said Bart De Smet, CEO of Ageas. “Being already present in the Indian life insurance market, we now will be able, through this new joint venture, to also fully grasp opportunities in the non-life market. We are confident that Ageas’s insurance expertise combined with Sundaram Finance’s market knowledge and position will take RSGI to a next level in terms of size and profitability.”
“For the next phase of growth, we are delighted to be partnering with Ageas, whose global experience, including several Asian countries, will be an asset,” said T T Srinivasaraghavan, managing director of Sundaram Finance. “Ageas is unique in its approach of working through local partnerships and joint ventures across Asia and we believe this can create significant value for Royal Sundaram.”
