CCI approves stake sale in Future Generali by Kishore Biyani-led Future Group

NEW DELHI: The Competition Commission has approved the proposed stake sale in Future Generali India Life Insurance Company by a Kishore Biyani-led Future Group firm to Industrial Investment Trust, saying the deal would not have any adverse impact on competition in the country.

The transaction involves Future Retail Ltd, earlier known as Pantaloon Retail (India), selling its 22.5 per cent in life insurer, Future Generali, to non-banking finance company, Industrial Investment Trust Ltd (IITL).

Approving the deal in an order dated May 9, fair trade regulator Competition Commission of India ( CCI) said the "proposed combination is not likely to have any adverse effect on competition in India"

Currently, Future Group firms -- Future Retail and Sprint Advisory Services Pvt Ltd -- hold 74.5 per cent stake in the life insurance company. The remaining shareholding of 25.5 per cent is with German entity Generali Group's subsidiary, Participatie Maatschappij Graafschap Holland NV.

As per the deal, besides purchasing 22.5 per cent stake in Future Generali IITL has the option to acquire another 1.5 per cent stake in the life insurer.

According to the regulator, there is "no horizontal overlap" among products or services offered by IITL and Future Generali.

However, there is a "vertical relationship" between the two entities since one of IITL's subsidiary -- IIT Insurance Broking and Risk Management Private Ltd -- is a insurance broker.

"... as per the information provided in the notice, the business procured by IITIBRM (IIT Insurance Broking and Risk Management) for FGILIL (Future Generali) during the year 2012 -13 constituted only around 10 per cent of the total business of FGILIL as well as the relatively minor share of FGILIL in the total life insurance premium income in India," CCI said.

In this context as well as the fact that there were about 340 registered insurance brokers till end of April, CCI said the "the vertical relationship between IITIBRM and Future Generali is not likely to raise any competition concern".

IITL had approached the regulator for clearance on April 2013 following a share purchase agreement between IITL and Future Retail and a Joint Venture Agreement on March 8, this year.