Insurance Australia Group Ltd. has agreed to sell its 26% interest in SBI General Insurance Co. Ltd. through two transactions.
Napean Opportunities LLP, part of PremjiInvest, will buy a 16.01% interest and an affiliate of Warburg Pincus LLC will acquire a 9.99% interest in SBI General Insurance. Total consideration amounts to more than A$640 million based on the current exchange rate, according to IAG.
The transactions are expected to close during the company's financial year ending June 30, 2020, subject to regulatory processes and approvals. Following the deals' completion, IAG expects an increase in its regulatory capital position of more than A$400 million and a net profit after tax of over A$300 million, which will be reflected in its results for the full year 2020.
IAG CEO Peter Harmer said the insurer decided to exit its general insurance joint venture with State Bank of India as it strengthens its focus on Australia and New Zealand.
The news comes a few days after Moneycontrol reported that Warburg Pincus and PremjiInvest were in advanced talks to acquire IAG's stake in SBI General Insurance.