PNB to acquire up to 33% in MetLife India

MUMBAI: Punjab National Bank is close to buying as much as 33% stake in MetLife India that will boost fee income for the staterun bank and provide the US insurer with the second-best financial distribution platform in the country. "PNB is in talks to pick up to 33% stake in MetLife," said a person familiar with the negotiations. "The deal may be finalised in the next few days," he added. Four more people familiar with the negotiations said the discussions on valuations are continuing.

There is no certainty that the transaction will take place. The discussions between PNB and MetLife also involve Jammu & Kashmir Bank , which owns 13% of the insurer. The state-run lender may buy out other shareholders such as J&K Bank and Shapoorji Pallonji & Co. There's no decision on that yet, the people said. MetLife Insurance managing director Rajesh Relan said the company would not comment on speculation. "We are one of the three short-listed companies by PNB as per their process and the discussions with the management are yet to begin," said Mr Relan.

PNB did not commit on the transaction either. "It would be premature to say we have zeroed in on MetLife. The bank will take a final decision based on the financial valuation report," said PNB executive director MV Tanksale. A senior bank executive in the know of the development said the deal is expected to be valued in the range of Rs 12-13 per share. The bank in April had short-listed three insurance companies including MetLife, Aviva and Bharti Axa Life Insurance for the commercial bid.

A banker involved in the deal said: "PNB wanted to invest in a insurance company which would offer it higher stake at an attractive price." MetLife is a JV between Jammu & Kashmir Bank, Shapoorji Pallonji & Co, US-based MetLife International and private shareholders. PNB is likely to buy out the stakes of J&K Bank and other private investors. J&K Bank's stake has come down to 13% from 25% when the JV was started in 2001. In 2010, MetLife had lost its bancassurance partner Axis Bank to Max New York Life. This resulted in a drop in their business.

Source: EconomicTimes