British global insurer Aviva has acquired an additional 23% share in its joint venture in India with Dabur Invest Corp.
The company said it completed on April 29 the acquisition of new shares in Aviva Life Insurance Company India Limited, increasing its shareholding to 49%.
Aviva said it can only get 49% of the shares since this is already the maximum permitted under India’s foreign direct investment (FDI) limits.
The insurer expects the acquisition to have a neutral impact on its International Financial Reporting Standards (IFRS) net assets.
In 2015, Aviva India contributed £36m to Aviva’s IFRS net assets and £4m to the company’s profits.
Aviva and Dabur formed their life insurance joint venture in 2001.
The agreement between the two companies included options exercisable in the event of future changes in FDI for which Aviva pays an annual option price to Dabur.
These options allow Aviva to purchase or Dabur to sell shares at prevailing fair market value such that the British insurer would hold up to the maximum number of shares permitted under FDI limits.