ICICI Bank’s board on Friday approved the sale of 9 per cent shareholding in ICICI Lombard General Insurance Company to its joint venture partner Fairfax Financial Holdings. The bank will get ₹1,550 crore from the stake sale. The proposed transaction values the company, which started operations in 2001-02, at ₹17,225 crore ($2.6 billion).
Upon completion of the transaction, the share ownership of ICICI Bank and Canada-based Fairfax in ICICI Lombard will be around 64 per cent and 35 per cent, respectively. ICICI Bank MD and CEO Chanda Kochhar said the transaction is expected to be completed by the fourth quarter. The stake sale follows the government notifying Indian Insurance Companies (Foreign Investment) Rules, 2015, whereby foreign partners in Indian insurance companies can hold up to 49 per cent stake, against 26 per cent earlier. Billionaire investor Prem Watsa-controlled Fairfax Financial Holdings, through its subsidiary Fairfax India Holdings Corporation, has been betting big on India.
In August, Fairfax India invested about ₹800 crore to pick a majority stake in National Collateral Management Services.
The same month, Watsa-backed Thomas Cook (India) bought Kuoni Group’s travel businesses in India and Hong Kong for ₹535 crore.Fairfax India had announced an open offer for 26 per cent of the outstanding equity shares of IIFL Holdings Limited for an aggregate cash consideration of ₹1,625 crore.