Axis Bank and Max Financial Services (MFS) have announced the signing of definitive agreements to become joint venture partners (JV) in Max Life Insurance Company (Max Life).
Axis Bank will hold 30 percent stake in Max Life post transaction closure. The joint venture arrangement will significantly improve Max Life’s competitive position vis a vis its competitors, including the other large bank owned private life insurers.
The Boards of Axis Bank, MFS and Max Life approved the transaction on 27 April 2020. This is an outcome of the inter-se discussions after the three companies had signed a confidentiality and exclusivity arrangement on 20 February 2020 to explore the possibility of a long-term strategic partnership between Axis Bank and Max Life.
Max Financial Services presently holds a 72.5 percent stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5 percent stake. Axis Bank also has a minor stake in the life insurer.
The transaction with Axis Bank follows the ongoing swapping by MSI of 20.6 percent stake that it holds in Max Life with a 21.9 percent stake in MFS.
MFS also plans to purchase MSI’s balance stake in Max Life. Post completion of the series of transactions, Max Life will become a 70:30 JV between MFS and Axis Bank. The proposed transactions are subject to approval of requisite corporate and regulatory authorities (including IRDAI, RBI and CCI).
The deal marks coming together of third largest private bank and fourth largest private life insurer. Max Life will include Axis Bank logo in its brand tag line.