State Bank of India (SBI) approves sale of 3.9%stake in SBI Life to KKR and Temasek for INR 1,794 crore
Mumbai, Singapore December 09, 2016
State Bank of India (SBI) at its Executive Committee meeting of the Board today approved, subject to the regulatory approvals, the sale of 3.9 crore shares of INR 10 each, equaling a 3.9% stake in its subsidiary SBI Life Insurance Company Limited (SBI Life) for INR 1,794 crores (US$ 264 mn). An investment vehicle affiliated with KKR-managed funds and an affiliate of Temasek, the Singapore based investment company, will each purchase 1.95 crore shares from SBI. The proposed transaction values SBI Life at INR 46,000 crores (at INR 460 per share). The transaction completion is subject to regulatory approvals.
Upon completion of the transaction, SBI will hold 70.1% stake in SBI Life while its joint venture partner, BNP Paribas Cardif, will continue to hold 26.0%.
Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited acted as the exclusive financial advisors for the transaction.
Quote from SBI: Mrs. Arundhati Bhattacharya, Chairman
State Bank of India is happy to welcome KKR and Temasek as our incoming partners in SBI Life. The partnership with KKR and Temasek is a recognition of the efforts of SBI Lifes commitment to create a high quality institution which is a leader in the private Indian Life Insurance space. Moreover, this transaction values SBI Life at Rs. 46,000 crores, reflecting significant value creation since its inception in 2001.
Quote from SBI Life: Mr. Arijit Basu, MD & CEO
SBI Life is a leader in an attractive industry with strong underlying growth drivers and this transaction particularly reflects investor conviction in the business strength of our franchise. We are delighted to partner with KKR and Temasek and look forward to an enriching association to support SBI Lifes continued growth, sustainable profitability and contribution to our policyholders progress.
Quote from KKR: Mr. Sanjay Nayar, Member & CEO of KKR India
We see exciting growth opportunities for Indian insurers stemming from increasing savings, a rising middle class and rapid urbanization. We look forward to supporting SBI Lifes long-term growth alongside these high-caliber partners, and are excited to enhance financial access for citizens across the country and promote the development of a more inclusive financial services industry.
Quote from Temasek: Mr. Rohit Sipahimalini, Joint Head, Temasek India
We are positive on the long term potential of insurance in India which is a play on growing middle income, rising household financial savings and supportive demographics. SBI Life stands well-positioned to benefit from these long term trends and we look forward to supporting SBI Life in its growth plans.
About State Bank of India
State Bank of India (SBI) is a systemically important bank with its headquarters in Mumbai, Maharashtra. As of March 31, 2016, SBI had 16,784 branches, including 198 foreign offices spread across 37 countries, making it the largest banking and financial services company in India. SBI, globally ranks 43rd in terms of brand value amongst 500 most valuable banking brands (Source: Brand Finance Banking 500 2016) and according to The Banker it ranks 55 in the world among the top 1000 banks in 2016.
About SBI Life Insurance Company Limited
SBI Life is a joint venture between State Bank of India and BNP Paribas Cardif. BNP Paribas is a French multinational bank and financial services company with global headquarters in Paris.
SBI Life is the fastest growing large private life insurer and the largest private life insurer by new business premium and number of policies sold. The company earned INR 7,107 crore and INR 4,640 crore of new business premium during FY2016 and H1FY2017 respectively. The company had 22% private sector market share in terms of new business premium.
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing worldclass people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE:KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.
Incorporated in 1974, Temasek is an investment company based in Singapore, with aS$242 billion (US$180 billion) portfolio as at31 March 2016.
Temasek’s portfolio covers a broad spectrum of sectors: telecommunications, media & technology; financial services; transportation & industrials; consumer & real estate; life sciences & agriculture; energy & resources. Its investment themes reflect Temaseks perspectives on long term trends:
- Transforming Economies;
- Growing Middle Income Populations;
- Deepening Comparative Advantages; and
- Emerging Champions
Temasek has offices in Singapore and other cities around the world, including Mumbai and Chennai in India; New York, San Francisco, So Paulo and Mexico City in the Americas; London in Europe; Beijing and Shanghai in China; and Hanoi in Vietnam.