IRDAI nods Mitsui Sumitomo’s 5% Max Life acquisition by Max Financial

Life insurance company, Max Financial Services Limited (MFSL), has recently announced that it has received approval from the Insurance Regulatory and Development Authority of India (IRDAI) to acquire the balance stake of 5.17% owned by MSI (Mitsui Sumitomo Company Limited) in Max Life (Max Life Insurance Company Limited).

Under this transaction, which entails the purchase of 1.2 million (9.91 crores) Max Life’ shares at USD 1.03 (INR 85) per share by MFSL, the parent company of Max Life, according to the Put/Call option has been approved by the MFSL Board on 3 March 2020 and by its shareholders on 27 May 2020 subsequently.

Sources further claim that the transaction is anticipated to be finalized in two weeks.

Speaking on the latest move, Analjit Singh, Chairman of Max Group, stated that the firm is grateful to IRDAI for this go-ahead.

Singh mentioned that this transaction would assist the firm in making its holding structure simpler and help to consolidate the shareholding in Max Life, further benefitting the shareholders by attracting more investor interest.

According to reports, MFSL had a 72.52% stake in Max Life, while MSI owned a 25.48% stake.

In December 2020, MFSL traded its 20.57% paid-up equity share capital in Max Life obtained by MSI to MFSL in exchange for 21.87% of the paid-up and issued share capital of MFSL. 

Reports also add that in March 2021, MSI obtained a 0.26% stake from Axis Bank; considering the stake of MSI in Max Life increased to 5.17%.

Following this, MFSL was waiting for approval from IRDAI for transferring the remaining stake of 5.17% held by MSI. After the finalization of MSI balance stake buyout of 5.17%

Eventually, the shareholding of MFSL in Max Life will increase to 87%.

For the unversed, Max Group is the largest corporate conglomerate in India, and Max Financial Services Limited (MFSL) is its subsidiary. Meanwhile, the largest non-bank, private life insurance firm in India, Max Life Insurance, is owned and actively managed by MSFL, which primarily focuses on life insurance.

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