Mitsui Sumitomo Insurance Company (MSICL) of Japan acquired a 26 percent stake in Max New York Life (MNYL), the country’s fourth largest private life insurance company, for Rs 2,731 crore. This is the second largest deal in the Indian insurance sector after Reliance Life sold its 26 percent stake to another Japanese insurer Nippon Life at about Rs 3,062 crore last year. As per existing regulation, a foreign partner can hold only up to 26 percent stake in an insurance joint venture. After the deal, MNYL will be renamed as Max India Insurance Company. However, MSICL will have two representatives on the board of the new joint venture company.
Under a complex agreement entered into by the firms, New York Life will sell 16.63 per cent of its holding to MSI. The remaining 9.37 percent would be sold to Max India for Rs 182 crore. Max India will then sell the 9.37 percent stake to MSI for Rs 984 crore.