The deal is part of L&G’s strategy to focus on the UK and US markets. The agreement in principle will see Warburg Pincus pay £79m ($105m €90m) for the stake in the joint venture.
On disposal, the consolidated Legal & General Group accounts will show a pre-tax profit of approximately £45m and the disposal will also result in a marginal improvement in the Solvency II coverage ratio.
Founded in 2009, IndiaFirst Life is a joint venture between Bank of Baroda (44% stake), Andhra Bank (30% stake) and Legal & General (26% stake).
“Legal & General is proud to have been a founding member of IndiaFirst Life and to have helped steer the company to its current position in the market, aided by the strong support of our joint venture partners, Bank of Baroda and Andhra Bank,” said Simon Burke, group commercial director, Legal & General.
“Legal & General has refocused its insurance business in recent years on the UK and the US and as a consequence we have disposed of a number of operations, including our businesses in the Netherlands, Ireland, France, Egypt and the Gulf. We are now following this strategy in relation to our stake in IndiaFirst Life. We are delighted to have reached an agreement in principle with Warburg Pincus, subject to regulatory approvals”.
Narendra Ostawal, managing director, Warburg Pincus, said: “IndiaFirst Life has demonstrated remarkable performance over the last few years, and we are excited to be partnering with Bank of Baroda and Andhra Bank to support the continued growth of the company and to help create value for all stakeholders.”
The transaction is subject to the approval of regulatory authorities and is expected to complete by the end of 2018.
