Anil Ambani-led Reliance Capital on Sunday announced completion of the transaction for sale of 26% stake in Reliance Life Insurance to Japan-based Nippon Life Insurance.
The entire transaction proceeds of Rs 3,062 crore ($680 million) from Nippon Life Insurance have duly been received, a company statement said. The transaction pegs the total valuation of Reliance Life Insurance at approximately Rs 11,500 crore ($2.6 billion).
Reliance Capital had signed a definitive agreement in March this year with Nippon Life Insurance to sell the 26% stake in Reliance Life Insurance, subject to regulatory approvals, which have since been received.
Nippon Life is the world’s seventh largest life insurer and the largest private life insurer in Asia and Japan.
In July, public sector Punjab National Bank (PNB) Okayed a proposal to partner Metlife India for its proposed life insurance business. Last year, PNB had invited expressions of interest (EoI) from Indian and foreign insurance firms to set up a strategic partnership with second largest public sector lender.
Analysts tracking the sector told HT that the many Indian promoters are in discussions to induct a third partner in the existing joint venture companies. Existing laws limit foreign direct investment (FDI) in the insurance sector to 26%.
Reliance Life Insurance Company Limited, a part of Reliance Capital, has an aggregate business premium of Rs 6,600 crore ($1.46 billion) as on March 31, 2011. Nippon Life Insurance posted revenues of Rs 3,49,834 crore ($80 billion) and a profit of Rs 12,199 crore ($3 billion) for the fiscal year ended March 31, 2011
“Nippon’s vast experience of over 122 years will help strengthen Reliance Life Insurance’s position as a leading and world class insurance company in India,” Sam Ghosh, CEO, Reliance Capital said.
“We are very happy to complete the transaction,” said Yoshinobu Tsutsui, president, Nippon Life Insurance.
[Source-HT]
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