Prudential (LSE:PRU) has announced the acquisition of a 75% stake in Bharti Life Insurance, representing the group’s first majority holding in an Indian life insurance business.
Deal valued at up to $467 million including contingent payment
The transaction will involve an initial payment of $389 million funded through existing company resources, with a further potential payment of up to $78 million subject to certain conditions being met. According to UBS, the agreement values the entire Bharti Life business at approximately $623 million, including the contingent consideration.
As part of the acquisition, Prudential intends to utilise its insurance and operational capabilities while also securing strategic distribution partnerships with Bharti Airtel and wealth management group 360 ONE.
ICICI stake reduction expected as part of regulatory process
The company said regulatory approvals linked to the acquisition are expected to require Prudential to reduce its holding in ICICI Prudential Life Insurance to below 10%, compared with its current 22% ownership stake.
Prudential added that its existing capital return programme covering the 2024-2027 period remains unchanged. Any proceeds generated from a potential reduction in its ICICI Prudential Life investment are expected to be used primarily to support the future expansion of the Bharti business, with any remaining capital contributing to the group’s free surplus position.
Separately, Prudential confirmed it is continuing to seek regulatory approval for its majority-owned Indian health insurance operation, Prudential HCL Health Insurance Limited.
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