Larsen & Toubro (L&T), Generali Group and Kishore Biyani promoted Future Group today entered into a non-binding agreement to merge L&T General Insurance with Future Generali India Insurance.
Post-merger, L&T will hold 51 per cent in the merged entity with Generali will hold 26 per cent stake and the rest 23 per cent will continue to be held by the Future Group.
"The completion of the transaction is subject to satisfactory due diligence by both the parties, execution of mutually agreed definitive binding documents and requisite approvals from Irda and other regulators and related corporate bodies," , L&T said in a statement.
Though the deal size was not given by the company, sources said the 51 per cent stake is valued at around Rs 560 crore.
As per the latest data available with Irda, while L&T General Insurance had a gross written premium of Rs 130 crore during the April-January period of current financial year, Future Generali had a premium collection of Rs 926.42 crore.
Earlier this month, Pantaloon Retail, the holding company of the Future Group had sold 22.5 per cent stake in Future Generali Life Insurance to investment company IITL for an estimated value of over Rs 300 crore. The deal valued the JV at over Rs 1,330 crore.
The move is aimed at helping the Future Group to pare some of its debt along with the plans to exit its non-core businesses.