German insurer Allianz has agreed to sell its 26 per cent stake in two Indian joint ventures to the Bajaj Group for approximately €2.6 billion, ending a decades-old partnership.

The binding share purchase agreements will see Allianz exit from both Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company, with the German firm potentially receiving the proceeds in several tranches.

Allianz said the decision came after "constructive and amicable talks" with Bajaj Finserv Ltd, but insisted that India remained an important growth market for the company.

"India continues to be one of Allianz's growth markets, and Allianz will explore new opportunities that strengthen its position in the market," the company stated in its announcement.

According to sources familiar with the situation, Allianz had previously tried unsuccessfully to increase its stake in the Bajaj joint ventures. One source indicated that Allianz is now exploring a possible venture with Mukesh Ambani-led Reliance Group firm Jio Financial Services, following reports last year by Bloomberg about potential partnership talks.

The transaction is subject to regulatory approvals, which are expected to take several months to complete. Upon transfer of shares and Allianz ceasing to be a promoter of the joint ventures, the joint venture agreements between Allianz SE and Bajaj Finserv Ltd will be terminated.

Allianz said it would consider options for deploying the proceeds that support the company's strategic ambitions, particularly reinvesting into potential new opportunities in India, while adhering to its updated capital management policy from December 2024.

The deal is expected to generate an IFRS gain of approximately €1.3 billion for Allianz and improve its Solvency II ratio by 6-7 percentage points.

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