Bajaj Allianz's Rs 26,000 Crore Breakup: Is Ambani’s Jio Behind the Exit?

India’s Bajaj Finserv and Germany’s Allianz SE have announced the breakup of their 24-year-old joint insurance venture, Bajaj Allianz, in a Rs 24,180 crore deal.

Bajaj Finserv, the financial services arm of the Bajaj Group, will buy out Allianz’s 26% stake in its life and general insurance businesses. The deal follows the Modi government's approval of 100% FDI in the insurance sector and reports of Allianz’s discussions with Mukesh Ambani’s Jio Financial Services for a possible joint venture.

According to an exchange filing, Bajaj Finserv has signed Share Purchase Agreements (SPAs) to acquire Allianz SE’s stake in Bajaj Allianz General Insurance (BAGIC) for Rs 13,780 crore and Bajaj Allianz Life Insurance (BALIC) for Rs 10,400 crore.

The transition will begin once Bajaj acquires at least 6.1% and Allianz SE is reclassified from a promoter to an investor.

Under the agreement, Bajaj Finserv will buy 1.01%, Bajaj Holdings and Investment Ltd. will acquire 19.95%, and Jamnalal Sons will take 5.04%, bringing the total acquisition to 26% in each insurance company. After the deal, Bajaj Finserv will hold a 75.01% stake in both firms.

Bajaj will also acquire Allianz’s 50% stake in Bajaj Allianz Financial Distributors for up to Rs 12.5 crore. All acquisitions are subject to regulatory approvals, including from the Competition Commission of India and the Insurance Regulatory and Development Authority of India.

Bajaj Goes Solo, Allianz to Stay in India

After ending the joint venture, Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, said, “Given the advantage of single ownership in both companies, we are confident the acquisition will become a big driver of value for our stakeholders in the years to come.”

Bajaj Finserv’s consolidated net profit rose 3% to Rs 2,231 crore in Q3FY25, up from Rs 2,158 crore a year earlier. Revenue from operations grew 10% to Rs 32,042 crore compared to Rs 29,038 crore in Q3FY24.

The company’s Assets Under Management (AUM) increased 28% to Rs 3,98,043 crore as of December 31, 2024, from Rs 3,10,968 crore a year earlier.

Meanwhile, German financial services firm Allianz stated that it will consider “reinvesting the sale proceeds into potential new opportunities in India.”

Allianz’s exit follows years of unsuccessful attempts to increase its stake in the joint venture. Since 2013, the company had reportedly sought to raise its holding to 49%. However, regulatory hurdles and Bajaj’s reluctance to give up control frustrated Allianz’s efforts.

In October, Bloomberg reported that Jio Financial Services was in talks with Allianz SE to form an insurance partnership in India, potentially setting up general and life insurance companies. Jio Financial, spun off from Mukesh Ambani’s Reliance Industries, already offers car, bike, health, and life insurance. A Reuters report noted that Allianz is still considering the partnership.