On receiving the approval from Competition Commission of India (C.C.I) – a regulatory authority who ensures fair trade, State owned Punjab National Bank (P.N.B) announced the purchase of 30% stake i.e 60.38 crores shares in the general insurer – Met Life Insurance Company without revealing the actual amount. Both P.N.B and Met Life had approached C.C.I. on 07th December 2012 for getting the investment approval.
MetLife India, as it was before the new stake of PNB, was a joint venture comprising, among others, J&K Bank, M. Pallonji Group, the US-based MetLife International, IGE India, and Chintalapati Holdings. MetLife International holds a 26 per cent stake — the maximum foreign direct investment allowed in the insurance sector — and Indian shareholders own the remaining 74 per cent. It is engaged in the business of distribution of life insurance products.
According to Competition Commission of India, the deal would not have any negative impact on the competition scenario and that the businesses currently offered by PNB and MetLife are not similar, identical or substitutable with each other. It further said that “although P.N.B. provides services to Met Life India as a distribution agent, the share of Met Life in the business of Life Insurance is relatively insignificant and is not likely to raise any adverse effect on competition in India”.
In addition to the above, both the companies have reached an agreement following which P.N.B. will be acting as an agent of Met Life India for the distribution of its insurance products.
