Calcutta, Jan. 23: Automobile battery major Exide Industries Ltd will acquire the entire stake in ING Vysya Life Insurance Company (IVL) for Rs 550 crore, marking the exit of Dutch insurer ING from its insurance business in India.
Exide is the largest shareholder in ING Vysya Life with a 50 per cent stake.
In a filing today at the Bombay Stock Exchange, the company said it "has in principle decided to acquire the remaining 50 per cent of the equity capital of IVL for an aggregate consideration of Rs 550 crore approximately, subject to regulatory approvals".
Besides buying ING's 26 per cent in ING Vysya, Exide said it would buy 24 per cent from two other private Indian investors ' Enam Group (7.68 per cent) and Hemendra Kothari Group (16.32 per cent). The transaction is likely to be completed in the first half of 2013.
ING had entered the life insurance sector in 2001 partnering GMR Industries. In 2005, GMR offloaded its stake, which was picked up by Exide.
ING has decided to sell its insurance and asset management businesses in Asia by 2013 as part of a global restructuring plan. The move will reportedly help the company to pay back bailout funds it received from the European Union in 2008.
According to data from the Insurance Regulatory and Development Authority of India, ING Vysya Life collected premiums of Rs 386.55 crore and Rs 0.54 crore from individual policies and group policies, respectively, in April-November 2012.
During the same period, all other private life insurers, excluding ING, together earned premiums of Rs 10,053.43 crore from individual policies and Rs 5,612.13 crore from group policies .
ING will be the second foreign insurer to exit the country. Last year, US-based New York Life sold its stake in Max Life Insurance.
Exide said it was looking for a new foreign partner in the life insurance company. "Post acquisition, EIL (Exide) has in-principle decided to identify and induct a new international player in the life insurance genre to infuse fresh equity into IVL (subject to regulatory approvals) for expansion plans," the company added in the filing.
A proposal to raise the foreign ownership in insurance firms to 49 per cent from 26 per cent has been stalled for a long time because of fierce political opposition.
The Exide scrip was down 1.03 per cent to Rs 124.90 on the BSE today.