New Delhi : Axis Bank Limited (Axis Bank) and Max Financial Services Limited (MFS) announced the signing of definitive agreements to become joint venture partners in Max Life Insurance Company Limited (Max Life).
Axis Bank will hold 30 per cent stake in Max Life post transaction closure. The development will result in a mutually beneficial and enduring relationship between Axis Bank and Max Life and bring the stability of a long-term partnership to India’s fourth largest private life insurance franchise.
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 late on 27th April 2020. This is an outcome of the inter-se discussions after the three companies had signed a confidentiality and exclusivity arrangement on Feb 20th 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 per cent stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5 per cent stake. Axis Bank also has a minor stake in the life insurer.
The aforesaid transaction with Axis Bank follows the ongoing swapping by MSI of 20.6 per cent stake that it holds in Max Life with a 21.9 per cent 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 70:30 joint venture between MFS and Axis Bank. The proposed transactions are subject to approval of requisite corporate and regulatory authorities (including IRDAI, RBI and CCI).
Max Life’s tag line will include Axis Bank’s name, which will further enhance customer trust in the brand and highlight the strength of the partnership.
Axis Bank is the third largest private bank and Max Life is the fourth largest private life insurer in India. The two companies have had a successful business relationship for over a decade, providing long term saving and protection products to over 19 lakh customers.
