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IDBI Bank to sell remaining 25 per cent stake in Ageas Federal Life Insurance to Ageas

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IDBI Bank has signed a share purchase agreement with Ageas Insurance International to sell its 25 per cent stake in Ageas Federal Life Insurance for ₹ 580.2 crore.

IDBI Bank has entered into a Share Purchase Agreement with Ageas Insurance International NV on May 19, 2022 to sell IDBI Bank’s entire stake of 20,00,00,000 equity shares in Ageas Federal Life Insurance Company Limited (AFLI) pursuant to exercise of Call Option by Ageas, ”the bank said in a stock exchange filing on Friday, adding that the transaction would be concluded subject to regulatory approvals.

Post the stake sale, Ageas will own 74 per cent stake in private sector Ageas Federal Life Insurance. It will be the first foreign investor to use the enhanced foreign direct investment cap of 74 per cent for the insurance sector.

The transaction is expected to be completed in the second quarter of the current fiscal, subject to regulatory approvals and satisfaction of the terms and conditions set out in the SPA.

Previously on March 29, the bank’s board had approved the proposal for the bank to sell its stake in the insurer.

Ageas Federal Life Insurance is a joint venture with IDBI Bank, global insurance giant Ageas and Federal Bank.

Ageas had previously increased its stake in the insurer to 49 per cent from 26 per cent in December 2020. Federal Bank’s stake will continue at 26 per cent. Following this, the insurer’s name changed to Ageas Federal Life Insurance from IDBI Federal Life Insurance.

Since becoming a subsidiary of Life Insurance Corpoation of India, IDBI Bank had been looking to pair its stake in Ageas Federal Life Insurance. It had stopped distribution of policies of Ageas Federal Life Insurance.

Published on

May 20, 2022

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