Edelweiss Financial Services on Friday said that it would exit the insurance broking business by selling its 70 per cent stake in Edelweiss Gallagher Insurance Brokers for Rs 307.60 crore. 

“The company has entered into an agreement...to divest its entire shareholding (currently 70 per cent) in Edelweiss Gallagher Insurance Brokers Ltd, a subsidiary, engaged in the business of insurance broking, to Arthur J Gallagher & Co...,” Edelweiss Financial Services said in a regulatory filing. 

Gallagher, which previously held 30 per cent in the business, would now be acquiring all the remaining shares, taking its stake to 100 per cent, the filing added. 

The company said that according to the agreement, 37,00,000 equity shares of Rs 10 each, representing 70 per cent of the paid-up share capital of Edelweiss Gallagher Insurance Brokers, held by the company, would be sold for a consideration of Rs 307.60 crore in one or more tranches in the manner as set out in the agreement. 

In addition to the sale consideration, Edelweiss Financial Services will also be entitled to receive a deferred contingent consideration based on the future revenue of Edelweiss Gallagher Insurance Broker in the manner set out in the agreement. 

Edelweiss Group Chairman Rashesh Shah said that the sale would provide the company “with the flexibility to reallocate capital and invest in scaling up our fast-growing life and non-life insurance businesses, making this a win-win for both of us.”