Ageas signs agreement to acquire a 40% stake in Indian Non-Life insurer RSGI
14 November 2018 - 7:00AM
Ageas announces
that it has signed today an agreement to acquire 40% of the share
capital of the Indian Non-Life insurance company Royal Sundaram
General Insurance Co. Limited (RSGI) for a total consideration of
EUR 186 million[1].
RSGI is a top 10 privately owned
player in the Indian general insurance market with strong positions
in Motor and Health insurance. The company benefits from extended
distribution capabilities with a nationwide network of more than
5,600 agents, 700 branches, and well-established relationships with
banks and other distribution partners off- and online. In
2018[2] RSGI
generated EUR 321 million inflows and EUR 10 million net profit and
realised between 2015 and 2018, an average annual growth rate of
19% and 55% in inflows and net profit respectively.
The transaction is subject to the
approval of regulatory authorities, and is expected to close in the
first half of 2019. After completion, Ageas will hold 40% of RSGI's
share capital, Sundaram Finance 50% and various other shareholders
the remaining 10%.
The acquisition fits Ageas's
strategy, as reconfirmed in its recently announced 3-year strategic
plan Connect21, to expand its activities in fast growing markets in
which it already operates, focussing on Non-Life insurance in
particular.
The acquisition will reduce the
Group Solvency II by approximately 5%.
This transaction will have no
impact on Ageas's share buy-back commitment under its Connect21
strategic plan as announced on 19 September 2018.
Commenting on the
agreement, Bart De Smet, CEO of Ageas, said: "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. 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."
Commenting on the
agreement, T T Srinivasaraghavan, Managing Director of SFL
said: "Over the past 18 years, Royal Sundaram
has built a sterling reputation in the market for its customer
service excellence, notably in claims management. The Company has
demonstrated strong growth in its chosen segments and is witnessing
a rapid growth in its 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.
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."
Ageas is a
listed international insurance Group with a heritage spanning 190
years. It offers Retail and Business customers Life and Non-Life
insurance products designed to suit their specific needs, today and
tomorrow. As one of Europe's larger insurance companies, Ageas
concentrates its activities in Europe and Asia, which together make
up the major part of the global insurance market. It operates
successful insurance businesses in Belgium, the UK, Luxembourg,
France, Portugal, Turkey, China, Malaysia, India, Thailand,
Vietnam, Laos, Cambodia, Singapore, and the Philippines through a
combination of wholly owned subsidiaries and long term partnerships
with strong financial institutions and key distributors. Ageas
ranks among the market leaders in the countries in which it
operates. It represents a staff force of over 50,000 people and
reported annual inflows close to EUR 34 billion in 2017 (all
figures at 100%).
Royal Sundaram
General Insurance Co. Ltd. is a subsidiary of Sundaram Finance,
a leading financial services provider based in Chennai, Southern
India. Sundaram Finance is a listed company with a market
capitalisation of EUR 1.9 billion that offers services including
general insurance, financing, mutual funds, business process
outsourcing ("BPO"), IT services and retail distribution. Royal
Sundaram General Insurance Co Ltd. is India's 1st
privately owned general insurance company (licensed in 2000) and
currently holds the 9th position in
that market segment (ex-standalone health insurers) offering
innovative general insurance solutions to individuals, families and
businesses directly as well as through its intermediaries and
affinity partners. The company offers Motor, Health, Personal
Accident, Home & Travel Insurance to individual customers and
offers specialised insurance products in Fire, Marine, Engineering,
Liability & Business Interruption risks to commercial
customers. Royal Sundaram also offers specially designed products
to the small & medium enterprises and rural customers as
well.
[1] Agreement
to acquire at a price of INR 15.2 billion, corresponding to an
amount of EUR 186 million calculated at the 13/11/2018 EUR/INR rate
of 81.74.
[2] Indian
accounting years with year-end in March
Pdf version of the press
release
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ageas via Globenewswire
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