New Delhi: The Life Insurance Corporation’s (LIC) acquisition of IDBI MF through its mutual fund arm moved a step further with the Competition Commission of India (CCI) giving its nod for the merger. On Wednesday, the CCI approved the proposal of LIC Mutual Fund Asset Management to acquire management rights over the schemes of IDBI MF from IDBI Asset Management.
Under the proposed deal, LIC Mutual Fund will acquire the rights to manage and administer the schemes of IDBI Mutual Fund from IDBI AMC. Also, LIC’s Mutual Fund Trustee will acquire the rights of trusteeship of the schemes of IDBI MF from IDBI MF Trustee Company.
According to a press communique issued on Wednesday, the schemes of IDBI MF will form part of LIC Mutual Fund (‘LIC MF’) with LIC AMC acting as the asset management company for the schemes of IDBI MF and LIC TC acting as the trustee company of the schemes of IDBI MF.
As part of consideration for the steps set out in the deal, apart from lump sum consideration, IDBI AMC will also acquire certain non-controlling shareholding in LIC AMC. The transactions set out as per the deal will be collectively referred to as the ‘proposed combination’.
LIC is the sponsor of LIC Mutual Fund. LIC is the ultimate parent company of LIC AMC and LIC TC. LIC AMC and LIC TC belong to the “LIC Group”. LIC AMC acts as the asset management company to LIC MF, while LIC TC acts as the trustee company of LIC MF in India. LIC AMC acts as an investment management advisor to LIC MF. It manages the investment portfolio and provides various administrative services to LIC MF.
According to the CCI communique, the target is the schemes of IDBI MF. IDBI Bank Ltd. is the sponsor of IDBI MF. IDBI AMC’s principal activity is to act as asset management company to the IDBI MF, while IDBI TC acts as the trustee company of IDBI MF in India.
On BSE, LIC share price closed at ₹572.80 apiece broadly flat on Wednesday compared to the previous closing. LIC is the largest life insurer in India with a market value of more than ₹3.62 lakh crore by end of March 22nd, 2023. Meanwhile, IDBI Bank’s share price closed at ₹47.58 apiece up by 1.64% on BSE.