The deal is a strategic move for Zurich to establish a “leading non-life insurance franchise” in the country. Credit: Michael Derrer Fuchs/Shutterstock.

Kotak Mahindra Bank (Kotak) has announced that Zurich Insurance Company (Zurich) will acquire a 70% stake in Kotak Mahindra General Insurance Company (Kotak General) in a single tranche for Rs55.6bn ($670.7m). 

This move follows the initial announcement in November 2023 and marks an entry into the Indian insurance market for Zurich. 

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Earlier, Zurich agreed to acquire a 51% stake in Kotak General through a combination of capital infusion and share purchase worth Rs40.51bn (SFr430.13m). 

Following the initial acquisition, the Swiss insurer planned to buy an additional 19% stake within three years of closing the deal, increasing its ownership in the Indian general insurer to 70%.   

The initial agreement was approved by the Indian competition regulator earlier this month. 

Under the new agreement, “Zurich will acquire 70% stake in Kotak General by way of a combination of primary and secondary acquisitions in a single tranche,” Kotak said in a stock filing.   

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“The other terms of the transaction remain unchanged,” the Indian lender added. 

The new deal is subject to customary conditions, including regulatory approvals from the Reserve Bank of India and the Insurance Regulatory and Development Authority of India. 

As per the initial announcement, the acquisition represents the largest investment by a foreign insurer in an India-based non-life insurance company 

Established in 2015, Kotak General, a fully owned subsidiary of Kotak, offers a wide range of general insurance policies.  

Its portfolio includes motor vehicle, home, property, commercial and health insurance, along with liability insurance, extended warranty insurance, and various health plans such as hospital cash and health indemnity policy.