Carlyle Group takes stake in SBI Life Insurance

Insurance acquisition news : Global investment firm The Carlyle Group has signed a deal to acquire a stake of 9% in India-based SBI Life Insurance from French insurance company BNP Paribas for an undisclosed amount.

SBI Life Insurance is the life insurance subsidiary of the State Bank of India (SBI). The public limited listed company, which was launched as a joint venture between SBI and BNP Paribas in 2001, employs over 12,000 employees and 94,000 agents.

The Carlyle Group used the CA Emerald Investments to buy the stake in SBI Life Insurance. CA Emerald Investments is an affiliated entity of Carlyle Asia Partners V, which in turn is Carlyle’s flagship $6.55b fund that is engaged in buyout and strategic investments in a range of sectors in the Asia Pacific.

As a result of the transaction, BNP Paribas Cardif, a subsidiary of BNP Paribas, and CA Emerald Investments now own stakes of 12.8% and 9.0% of the Indian life insurance company, respectively. SBI continues to be the majority shareholder with a 62.1% stake in SBI Life Insurance.

Carlyle Group buys 9% stake in SBI Life Insurance from BNP Paribas. Photo courtesy of SBI Life Insurance Company Limited/Wikipedia.org.

Sunil Kaul – Carlyle Asia Buyout’s advisory team managing director believes that the Indian life insurance industry has tremendous growth potential because of the favorable demographics and also a growing focus on financial savings.

“SBI is the most trusted brand in financial services, with an unparalleled nationwide branch network and a commitment to providing convenient access to quality financial services to every Indian. SBI Life, led by a strong management team, is helping deliver this promise in the life insurance space and is well-positioned to further benefit from industry trends”, said Sunil Kaul.

With this transaction, BNP Paribas is expecting a capital gain after tax in excess of more than €450 million in the group’s Q1 2019 results. Additionally, it is expected to have a positive impact on the Group CET1 ratio of around 5bp as of 31 March 2019.

Renaud Dumora – CEO of BNP Paribas Cardif said: “I thank SBI for the quality of our partnership over the last 18 years in building together SBI Life, a strong life insurance franchise. We continue to be highly optimistic about the company’s future.”