Axis Bank-Max Life Joint Venture Deal Revised

Axis Bank Ltd. will buy a lower stake than it earlier said in Max Life Insurance Co. Ltd. as the two companies altered the deal.

The private lender will now acquire 17% in the insurer to increase its holding to 18%, according to its exchange filing. That’s lower than 29% that Axis Bank earlier planned to buy to increase its stake to 30%.

The companies executed a definitive agreement but have yet to approach regulatory authorities with revised applications, Max Financial Services said in a statement on Monday. This revision follows some “recent developments”, it said, without giving details.

In a statement issued on July 23, Max Financial Services had said based on correspondence with the insurance regulator, the company and Axis Bank had agreed to make some changes to the “value creation options and factor in some alternate mechanisms”.

Also Read: What Axis Bank’s Stake Purchase Means For Max Financial

Under a value-creation option under the original deal, Axis Bank could swap its holding with Max Financial Services if the merger between the parent and its insurance arm didn’t fructify within the agreed deadline. The transaction also provided Axis Bank a put option to sell all the shares held in Max Life at Rs 294 apiece if the value-creation option is not consummated within 63 months from the closing.