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Fairfax Financial to sell part of stake in ICICI Lombard to Warburg Pincus

Fairfax Financial Holdings Ltd. agreed to sell part of its stake in India-based ICICI Lombard General Insurance Co. Ltd. to several companies, including one owned by private equity funds managed by Warburg Pincus LLC.

FAL Corp., a wholly owned unit of Fairfax Financial, will sell a 12.18% stake in ICICI Lombard, to three companies, according to a May 27 release.

The deal includes the sale of a 9% stake to Red Bloom Investment Ltd., a company wholly owned by private equity funds managed by Warburg Pincus, a 1.59% stake to Tamarind Capital Pte. Ltd., a company wholly owned by the Clermont Group, and a 1.59% stake to IIFL Special Opportunities Fund.

The proposed transaction values ICICI Lombard at 203 billion rupees.

Fairfax Financial, which owns a 35% stake in ICICI Lombard, is looking to divest part of its stake in order to start a new general insurance joint venture in India. Following the stake sale, ICICI Bank Ltd. will hold a stake of about 63% in ICICI Lombard, while Fairfax Financial will hold a stake of approximately 22%.

The transaction is subject to government and regulatory approvals and is expected to close in the third quarter of 2017.

As of May 26, US$1 was equivalent to 64.50 Indian rupees.