Bharti AXA-SBI Life deal falls through, opens door for PE investors

The anticipated acquisition of Bharti AXA Life Insurance by SBI Life Insurance has collapsed due to disagreements over valuations, delaying the Mittal family's exit from the financial services sector. This development opens the door for private equity firms to potentially acquire Bharti AXA Life, which is up for sale as the Mittal family aims to focus on their core telecom business and divest from non-core revenue streams.

The negotiations faltered because Bharti Group's asking price was higher than what SBI Life was willing to pay, especially given Bharti AXA's declining business performance. Despite Bharti Group becoming the sole owner after buying out AXA's share in October 2023, the insurer has struggled financially, reporting a 23% decline in premium income for FY24. With plans to rebrand and seek private equity investment, Bharti AXA Life aims to complete the exit before the rebranding process, expected within the next six months.

The collapse of the Bharti AXA-SBI Life acquisition talks marks a significant development in the Indian insurance industry. While the deal's failure highlights the complexities and challenges of large-scale mergers and acquisitions in this sector, it also opens up new opportunities for private equity firms to invest and reshape market dynamics. The next steps taken by Bharti AXA Life, SBI Life, and potential PE investors will be closely watched by industry stakeholders and could set new precedents for future deals in the insurance space.