Mumbai (Maharashtra) [India], April 28 (ANI): Axis Bank and Max Financial Services on Tuesday announced the signing of definitive agreements to become joint venture partners in Max Life Insurance Company in which the private sector lender will hold 30 per cent stake in Max Life post transaction closure.
"The development will result in a mutually beneficial and enduring relationship between Axis Bank and Max Life and bring the stability of a long-term partnership to India's fourth-largest private life insurance franchise," said the companies in a joint statement.
"The joint venture arrangement will significantly improve Max Life's competitive position vis-a-vis its competitors, including the other large bank-owned private life insurers," said the statement.
The boards of Axis Bank, MFS and Max Life approved the transaction late on Monday. This is an outcome of discussions after the three companies had signed a confidentiality and exclusivity arrangement on February 20 to explore the possibility of a long-term strategic partnership between Axis Bank and Max Life.
Max Financial Services presently holds 72.5 per cent stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5 per cent stake. Axis Bank also has a minor stake in the life insurer.
The transaction with Axis Bank follows the ongoing swapping by MSI of 20.6 per cent stake that it holds in Max Life with a 21.9 per cent stake in MFS.
MFS also plans to purchase MSI's balance stake in Max Life. Post completion of the series of transactions, Max Life will become a 70:30 joint-venture between MFS and Axis Bank.
The proposed transactions are subject to the approval of requisite corporate and regulatory authorities (including IRDAI, RBI and CCI).
Max Life's tag line will include Axis Bank's name, which will further enhance customer trust in the brand and highlight the strength of the partnership, said the companies.
"We continue to believe in the long term prospects of India's under-penetrated life insurance space, current environment notwithstanding," said Axis Bank Managing Director and CEO Amitabh Chaudhry.
"We believe this transaction will allow us to deepen our working relationship leading to better integrated teams and infrastructure and a superior alignment in our approach," he added.
Analjit Singh, Founder and Chairman of Max Group said the move is an emphatic signal that Max Life will become an even more formidable player in the Indian life insurance space.
"I believe that in Axis, we have found an exceptional partner and we have a conviction that this will make Max Life fundamentally stronger, better performing and will bring stability to the franchise," said Singh.
Axis Bank is the third-largest private sector bank in India. It offers the entire spectrum of services to customer segments covering large and mid-corporates, small and medium enterprises, agriculture and retail businesses.
Max Financial Services actively manages a 72.5 per cent stake in Max Life Insurance, making it India's first listed company focused exclusively on life insurance.
Besides a 28.3 per cent holding by Analjit Singh sponsor family, some of Max Financial Services' marquee shareholders include KKR, New York Life, Baron, Vanguard, Blackrock, Aberdeen, First Voyager, Jupiter, Dimension, East Spring and the asset management companies of Nippon, HDFC, ICICI Prudential, Aditya Birla Sun Life, Mirae, BNP, DSP and Sundaram. (ANI)