Bank of India on Saturday said it would have a majority stake of 51 per cent in its proposed asset management joint venture with AXA Investment Managers. French financial services firm AXA currently has 74 per cent stake in an asset management joint venture, Bharti Axa Investment Managers, with Indian telecom major Bharti. According to senior bank officials, AXA would acquire Bharti's 26 per cent stake in the firm and then transfer 51 per cent of its holdings to the bank. AXA will hold the remaining 49 per cent stake in the joint venture. Bharti Axa Investment Managers is currently the asset management company to Bharti AXA Mutual Fund.
Ernst & Young were the advisors to the transaction. The bank did not disclose the size of the deal. The transaction is subject to regulatory approvals. The bank expects the regulatory processes to be completed by end of this financial year.
The deal will mark Bank of India’s re-entry in asset management business. The bank had started a mutual fund business in 1990. However, it exited in 2004. Of the six schemes launched by the fund, four were redeemed. The other two were sold to Taurus Mutual Fund in 2004 after giving an exit option to investors.
Bharti Axa has been looking to rope in an Indian bank as a partner for some time. In its annual report for 2009-10, the company said it was scouting for a joint venture partner, preferably a bank, to increase its distribution reach.
