PremjiInvest, Carlyle, ChrysCapital, and GIC of Singapore are amongst the six private equity firms that are in talks with Insurance Australia Group (IAG) to acquire its 26 per cent stake in SBI General Insurance for about Rs 3,000 crore (approximately $435 million), according to a report by ET.
The proposed transaction pegs the valuation of SBI General Insurance at Rs 12,000 crore (approximately $1.74 billion), the report further added, quoting sources.
Talks are at an advanced stage and the deal, if fructifies, is likely to be announced soon, following which it will go up to the insurance regulator IRDAI for its approval. It is understood that Goldman Sachs is facilitating the proposed transaction.
SBI General Insurance, the eight largest private sector general insurer, is a joint venture between the State Bank of India and IAG, wherein the former currently owns as much as 70 per cent of the total capital. Last year in September, SBI had sold its 4 per cent stake in SBI General Insurance to Axis New Opportunities Fund and PremjiInvest, at a valuation of Rs 12,000 crore.
It is understood that the biggest Australian general insurer had acquired the stake in the JV in 2010 for as much as Rs 542 crore.
So far, a host of PE giants have evinced interest in picking up stake in the Mumbai-headquartered insurer. It may be a situation that some of the shortlisted PE firms team up with each other to purchase the stake in SBI General Insurance.
The development comes at a time when IAG has kickstarted an initiative to restructure its operations in the Asia-Pacific region to focus on New Zealand and Australia. The company has already exited its businesses in Indonesia, Thailand and Vietnam.
