MUMBAI State Bank of India (SBI.NS) has agreed to sell a 3.9 percent stake in its life insurance arm to affiliates of KKR (KKR.N) and Temasek [TEM.UL] for 17.94 billion rupees ($266 million), the nation's biggest lender said on Friday.
The affiliates of KKR and Temasek will pick up 1.95 percent each in SBI Life, valuing the insurer at 460 billion rupees, the lender said in a statement, adding the deal was subject to regulatory approvals.
SBI Life will consider an initial public offering of shares during the next financial year beginning April 2017 depending on market conditions, Chief Executive Arijit Basu told Reuters.
State Bank of India currently owns 74 percent of the life insurance business, while BNP Paribas Cardif owns the remainder.
After the sale to KKR and Temasek, SBI's stake in the insurer will fall to 70.1 percent.
BNP Paribas Cardif continues to evaluate an offer from State Bank of India to pick up a further 10 percent stake in SBI Life, Basu said.
Kotak Mahindra Capital and SBI Capital Markets were the advisers on the deal with KKR and Temasek.
(Reporting by Devidutta Tripathy; Editing by Amrutha Gayathri)