Edelweiss Financial Services Ltd will sell a minority stake in wholly owned subsidiary Edelweiss Insurance Brokers Ltd to the US-based Arthur J. Gallagher & Co., a brokerage and risk management services firm.
The deal is subject to regulatory approvals, Edelweiss Financial said in a statement on Tuesday. It didn’t disclose any financial details.
Edelweiss Group chairman and chief executive officer Rashesh Shah said the stake sale would give the brokerage unit’s customers access to international markets and a larger range of insurance services offerings.
Separately, Gallagher president and CEO J Patrick Gallagher Jr. said the transaction would allow his company to expand its presence in India, and that it was in line with its strategy of investing in “market-leading businesses that broaden our specialist capabilities”.
Founded in 1927, Gallagher has a presence in 35 countries and has over 30,000 employees globally. It also offers client service capabilities in more than 150 countries through a correspondent broker and consultant network. The group provides risk management products and services to its clients.
Edelweiss Insurance, which began operations in 2005, acts as a composite broker. The firm provides services such as risk management and monitoring, claims management services and designing insurance programmes.
The stake sale is the latest instance of Edelweiss roping in a foreign partner to grow its various financial services businesses.
In February, for instance, Edelweiss said that Allianz Investment Management, part of German insurer Allianz Group, had invested $200 million in its private debt platform.
The following month, Canadian pension fund CDPQ agreed to invest about $250 million in ECL Finance Ltd, the non-banking financial arm of Edelweiss Group.
Meanwhile, Edelweiss Financial is raising up to $1 billion for its structured credit-focussed Edelweiss Special Opportunities Fund III. The target is nearly triple the sum of $350 million that Edelweiss had raised in April 2017 for ESOF II. Its first credit fund, ESOF I, had pooled together $230 million.
The company reported net sales of Rs 303.03 crore for the financial year ended March 2019.
