Ageas Insurance International, the Belgium-based insurance firm, is acquiring 40 per cent of Royal Sundaram General Insurance Company (Royal Sundaram) for Rs 1,520 crore.

Ageas will acquire the stake from Sundaram Finance (SFL) and other domestic shareholders in the general insurance firm.

In a filing to the bourses on Wednesday, Sundaram Finance said these parties have signed an agreement wherein Ageas will acquire a 40 per cent of Royal Sundaram for Rs 1,520 crore. The transaction will value Royal Sundaram at Rs 3,800 crore.

While Sundaram Finance holds a 75.90 per cent stake in Royal Sundaram, it proposes to divest 25.90 per cent, thus retaining 50 per cent of its holding after the divestment.

The statement added that some of the existing Indian shareholders will hold the balance 10 per cent in Royal Sundaram.

JM Financial acted as the exclusive financial adviser and J. Sagar & Associates were the legal adviser to Sundaram Finance and Royal Sundaram General Insurance for the transaction.

The transaction is subject to certain conditions, including the approval of the Insurance Regulatory and Development Authority of India (IRDAI) and other regulators. The transaction is expected to close in the first quarter of 2019.

Royal Sundaram is among the top 10 players in the private general insurance market with strong positions in motor and health insurances. It has a network of more than 5,600 agents and 700 branches (consisting of its own branches and that of SFL.)

In 2017-18, Royal Sundaram generated gross written premium (GWP) of Rs 2,643 crore and achieved a profit after tax of Rs 83 crore.b