CCI approves acquisition of additional shareholding in Acko Technology by General Atlantic Singapore

What happened

The Competition Commission of India (CCI) approved a proposed shareholding acquisition in the insure-tech sector by passing the merger-combination review required under India’s competition law framework. Approving authority: Competition Commission of India (CCI).Acquirer: General Atlantic Singapore ACK Pte. Ltd., an investment holding company incorporated under the laws of Singapore.Target: Acko Technology & Services Private Limited (Target), an insure-tech private limited company incorporated in India.Core action approved: acquisition of additional shareholding of the Target by the Acquirer.

Background and earlier position

The proposed combination is structured around the Target’s capital raise. The Target’s deal path is tied to the Target’s Rights Issue (a company’s offer of new shares to existing shareholders in proportion to their current holdings).The CCI approval is for the acquisition of additional shareholding on a fully diluted basis (a way of counting shareholding by assuming potential future conversions that could increase the number of shares). The Target’s operating footprint in India includes insurance and insurance distribution-related entities. Acko Technology & Services Private Limited has three (03) wholly owned subsidiaries in India: Assurelink, Acko General Insurance, and Acko Life Insurance.Acko General Insurance is a licensed general (non-life) insurance provider.Acko Life Insurance is a licensed life insurance provider.Assurelink is awaiting Corporate Agency License from IRDAI (Insurance Regulatory and Development Authority of India) to engage in the business of distribution of insurance policies in India. The Acquirer is part of a global investment platform. General Atlantic Singapore ACK Pte. Ltd. is affiliated with a group of General Atlantic investment funds providing capital and strategic support across sectors mentioned in the government release: technology, healthcare and life sciences, infrastructure and real estate, financial services, consumer, climate and sustainable infrastructure.

What changed now (the approved combination)

The newly approved combination involves the Target’s rights issue leading to an ownership level change. The proposed acquisition is expected to cross the 25% threshold of shareholding of the Target on a fully diluted basis.The 25% threshold crossing is pursuant to the Target’s Rights Issue.