Zurich Insurance stake pick: Private lender Kotak Mahindra Bank on Friday informed that Zurich Insurance Company has given a go ahead to acquire 70 per cent stake instead of 51 per cent in its general insurance arm.

Last year in November, Zurich Insurance Company had revealed its plans to acquire a 51 per cent stake in Kotak Mahindra General through a combination of capital infusion and share purchase, followed by a subsequent acquisition of an additional stake of 19 per cent within a period of three years from the initial acquisition.

"The parties to the aforesaid transaction, viz., the bank, Zurich, and Kotak General have mutually agreed that Zurich will acquire 70 per cent stake in Kotak General by way of a combination of primary and secondary acquisitions in a single tranche, for a total consideration of approximately Rs 5,560 crore, instead of the proposal announced in our earlier disclosure," the bank said in a regulatory filing.

Kotak Mahindra Bank has said that the other terms of the transaction remain unchanged.  The proposed 70 per cent acquisition would be subject to fulfilment of customary conditions precedent, including the receipt of regulatory approvals from the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (IRDAI), Kotak Mahindra Bank said.

The current regulatory guidelines allows a foreign entity to own up to 74 per cent in an insurance venture in India. Earlier this month, competition watchdog, Competition Commission of India (CCI) approved acquisition of 70 per cent stake by Zurich Insurance Company Ltd in Kotak Mahindra General Insurance Company Ltd.

The acquirer is a wholly owned subsidiary of Zurich Insurance Group Ltd (Zurich Insurance Group). It is a leading multi-line insurer serving people and businesses in more than 200 countries and territories. 

(With PTI inputs)