India’s billionaire Burman family is going to divest its stake in life insurance joint venture with British insurance giant Aviva.
As a result of the divesture, Burman family’s stake in the JV will drop from 51% to 26% and Aviva’s shareholding will rise to 74% from 49%, which will give it control of the life insurer, Aviva Life, Mint reported citing two people with direct knowledge of the matter.
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“Going by the current actuarial valuations, the 25% stake to be augmented by Aviva could be worth at least $201.34m (INR15bn). The business is growing, and Aviva Life’s potential is huge, given the niche markets and customer segments in which Aviva Life has a better grip than other life insurers in India,” one of the two people were quoted by Mint as saying.
If the talks succeed, the deal may be announced within two months, the report added.
The deal was confirmed by Mohit Burman, chairman of Aviva Life Insurance and vice-chairman of Dabur India.
Mint quoted Burman as saying: “Aviva Plc has decided to increase stake from 49% to 74% when the regulations permit, and the Burman family will continue to be the JV partner.”
The Burman family owns the Indian brand Dabur, which was founded 137 years ago. The family may use the proceeds from the deal to boost its FMGC sector business through Dabur.
In 2016, Aviva picked an additional 23% stake in life insurer for $126.17m. The deal valued Aviva Life at about $548.59m.
