The regulatory body Fair Trade CCI gave its approval on Tuesday to the proposal by Prudential Corporation Holdings, a division of the British financial giant Prudential plc, to acquire a stake in Bharti Life Insurance Company Ltd.
In its statement, the Competition Commission of India (CCI) specified that the proposed deal involves the acquisition of a certain share of equity in Bharti Life Insurance Company Ltd (the Target) by Prudential Corporation Holdings Ltd (the Buyer).
Prudential Corporation Holdings acts as a holding company managing the group's insurance and asset management operations in Asia, and also supports its business in Asia and Africa. Bharti Life Insurance is an insurer licensed by IRDAI.
Earlier this year in May, the British company Prudential plc announced its intention to acquire a controlling stake of 75 percent in Bharti Life Insurance for a sum of 3,500 crore rupees from Bharti Life Ventures Pvt Ltd and 360 ONE Asset Management.
Currently, Prudential holds approximately 22 percent of shares in its insurance enterprise jointly with ICICI Bank. Due to the planned acquisition, the company will need to reduce its stake in the existing enterprise to comply with regulatory requirements.
Prudential Plc previously reported that the initial cash consideration for this deal would be 3,500 crore rupees (approximately 389 million US dollars), which will be paid upon completion of the transaction.
After the closing of the deal, Prudential's Indian operations will include the majority-owned Bharti Life Insurance Company, as well as Prudential HCL Health Insurance Ltd. In addition to minority stakes in two public entities—35 percent in ICICI Prudential Asset Management Company Ltd and 22 percent in ICICI Prudential Life Insurance Company.
As part of this deal, Bharti Life will also explore the possibility of entering into strategic distribution agreements with Bharti Airtel and 360 ONE.
Deals exceeding a certain threshold require regulatory approval, which monitors the prevention of unfair business practices and promotes fair competition in the market.