CCI Clears Sanlam's Stake Buy in Shriram Grp's Insurance Firms

South Africa-based financial services firm Sanlam Ltd has got fair trade regulator CCI's approval to acquire 23 percent stake each in Shriram Group's two insurance firms. The acquisition will be done through Sanlam Emerging Markets (Mauritius) a group firm of Sanlam Ltd. As per the notice filed by Sanlam Emerging Markets (SEM), it will acquire 23 percent stake each in Shriram Life Insurance Company (SLIC) and Shriram General Insurance Company (SGIC) from Shriram Capital Ltd. In this regard, the entities entered into a sale of shares agreement in February this year.

Clearing the deal, CCI - which keeps a tab on unfair business practices across sectors - said "the proposed combination is not likely to have an appreciable adverse effect on competition in India". SEM is a subsidiary of Sanlam Life Insurance which in turn is a subsidiary of Sanlam Ltd. The firm is engaged in holding investments in businesses related to insurance, banking, and investment management. Post deal, the total shareholding of the SEM in Shriram Life Insurance and Shriram General Insurance will increase to 42.39 percent and 42.99 percent, respectively, the watchdog said in an order last month citing notice submitted by SEM.

 "Since the rights enjoyed, at present, by the SEM in the targets (SLIC and SGIC) shall remain unchanged post the proposed combination, the increase in the shareholding of the SEM in the targets, post proposed combination, will not result in any change in control of the targets," the order said.