Zurich Insurance will pay Rs 5,560 crore in one installment to acquire a 70% interest in Kotak General

Zurich Insurance will pay Rs 5,560 crore in one installment to acquire a 70% interest in Kotak General

In a report to the market, Kotak Mahindra Bank said that Zurich will purchase a 70% share in Kotak General in a single tranche via a mix of main and secondary purchases.

According to Kotak Mahindra Bank, the planned 70% purchase is contingent to meeting usual requirements, such as obtaining regulatory clearances from the Insurance Regulatory and Development Authority of India (IRDAI) and the Reserve Bank of India (RBI).

On February 23, private sector lender Kotak Mahindra Bank announced that Zurich Insurance Co Ltd will pay Rs 5,560 crore in one installment to buy a 70% interest in Kotak General.

With a mix of new expansion capital and share purchases, Zurich Insurance initially announced in November 2023 that it would buy a 51 percent interest in Kotak Mahindra General Insurance Company. Later, the company would acquire an additional 19 percent stake.

The parties to the aforementioned transaction, namely the Bank, Zurich, and Kotak General, have mutually agreed that Zurich would pay a total consideration of $77 million to acquire a 70% share in Kotak General via a mix of primary and secondary purchases made in a single tranche. In a report to the markets, Kotak Mahindra Bank said that the purchase would cost around Rs 5,560 crore, as opposed to the offer disclosed in our previous disclosure ("Proposed 70% Acquisition").

According to Kotak Mahindra Bank, the planned 70% purchase is contingent to meeting certain usual requirements, such as obtaining regulatory clearances from the Insurance Regulatory and Development Authority of India (IRDAI) as well as the Reserve Bank of India (RBI).

The Competition Commission of India (CCI) announced on February 6 that it has authorized Zurich Insurance Company's acquisition of a 70% share in Kotak Mahindra General Insurance Company. A wholly owned subsidiary of Kotak Mahindra Bank is Kotak Mahindra General Insurance Company.

Kotak Mahindra Bank said in Q3FY24 that their net profit for the quarter ended in December 2023 increased by 7.6% to Rs 3,005 crore. While its net interest margin (NIM) for Q3FY24 dropped to 5.22 percent from 5.47 percent, its net interest income (NII) climbed to Rs 6,554 crore for the period under review from Rs 5,653 crore a year earlier. The company's net non-performing assets (NPAs) were 0.34 percent compared to 0.48 percent, while its gross non-performing assets (NPAs) were 1.73 percent compared to 1.91 percent.

Kotak Mahindra Bank shares finished at Rs 1,724.80 on the BSE, down Rs 1.70 or 0.098 percent.