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This article is written by Shishank Shaw, pursuing a Certificate Course in Competition Law, Practice And Enforcement from


In January 2021, the Competition Commission of India approved the Axis-Max Life Insurance deal. This was the final approval needed to consummate the deal that was announced in April 2020. The deal originally proposed a joint-venture between the parties in which Axis Bank would raise its 1% stake in Max Life to 30% but faced backlash from regulators of the insurance market and the Central Bank. Hence it underwent several amendments before getting their respective approval. This article explores the journey of this deal and we start by introducing all the entities involved.

Parties to the Transaction

Axis Bank Ltd, Axis Capital Ltd and Axis Securities Ltd (Acquirers/ Axis Entities)

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Axis Bank is an Indian private sector bank involved in Retail Banking, lending, and deposits. It also provides wholesale banking; payment solutions; wealth management etc. 

Axis Capital and Axis Securities (subsidiaries of Axis Bank) are engaged in providing services in investment banking and institutional equities and brokerage services (including life insurance) respectively. 

Max Life Insurance Company Ltd (Target Company) is a part of Max Group and engages in providing life insurance (individual and group plans), annuity products and investment plans in India.

Max Financial Services Ltd (Seller) is the parent company of Max Life Insurance.

Background of the deal

Two months after announcing the deal the parties approached the Insurance Regulatory and Development Authority of India (IRDAI) seeking its approval. The regulator after scrutinising the deal raised its concerns over four clauses in the merger agreement they were: An option for Axis bank to sell its stake; possible merger between Max Life with Max Financial Services:

  • Axis Bank’s right to appoint an observer in Max Life’s board meetings and rights bestowed upon one of the two companies to appoint auditors in Max Life. While putting the deal on hold, it ordered the parties to amend and delete certain clauses of the agreement.

Amendments made by the parties

Section 35 of the Insurance Act, 1938 prohibits a merger of an insurance company’s business into the business of a non-insurance firm. The intention behind the merger of Max Life and Max Financial was to get the former listed on the stock exchange but it violated the above-mentioned provision. IRDAI had blocked the merger Max Life and HDFC Standard Life Insurance Co. Ltd on similar grounds. Hence it was deleted from the deal. Along with this the parties also amended the clause that empowered one of the two parties to appoint auditors in Max Life on the regulator’s advice.

In August, Axis Bank changed the deal structure in which it would acquire 17 percent of Max Life, reducing from its earlier proposal of 30% but in October, this change was refused by Reserve Bank of India (RBI) adding another twist in the deal.

The New Deal

Following RBI’s rejection, Axis bank revised the deal a second time and according to it, Axis Bank would acquire 9% stake in the target company and its subsidiaries Axis Securities and Axis Capital would acquire 2% and 1% stake respectively. Also, Axis entities would have the right to acquire up to 7% stake in the target company going forward taking their overall stake to 19.99%.

This revised the deal was guided by Para 5(b) of the Master Direction- Reserve Bank of India that exempted entities from getting RBI’s approval for an acquisition involving less than 10% of the investee company’s paid-up capital and allowed Axis Bank to move forward with the acquisition without any approval from the Central Bank. 

Unfortunately, it also restricted Axis Bank from acquiring more than 10% stake in the target company, therefore to balance the 7% stake in the target company it involved its two subsidiaries; Axis Securities and Axis Capital.

This amended new deal was sent to IRDAI for its approval and this time the regulator approved it.

Now it approached the competition regulator of India, Competition Commission of India seeking its approval and consummating their deal.

Submissions before Competition Commission of India

The parties filed a notice under Section 6(2) of the Competition Act, 2002 (“Act”). The revised deal was an acquisition; a type of Combination under the Act and was mandatory to be notified by the parties else they would have been penalised by CCI under Section 43A of the Act.

The parties submitted that the proposed combination is not likely to raise any competitive concerns or cause an appreciable adverse effect on competition in India and delineated the relevant market at two levels; Upstream and Downstream. 

Max Life Insurance provided insurance products in India at upstream level and Axis Bank and Axis Securities provided third party distribution of insurance products, including the life insurance products at downstream level which indicated the presence of a vertical relationship between Axis Bank and Target and Axis Securities and Target Company. 

Accordingly, the parties identified and defined two relevant markets; “Market for life insurance in India” (‘Upstream Market’) and “Market for distribution of life insurance in India” (‘Downstream Market’). 

Observations made by the Commission

While approving the Combination wide Combination Registration No. C-2020/12/795 the fair trade regulator made the following observations:

It accepted the delineation of relevant markets by the parties while noting that the market shares of the parties at both levels of market were insignificant enough not to raise any competition foreclosure, thus it kept the relevant market open.

It observed that the parties faced competitive constraints at both levels of the market post combination. At upstream level/ market for life insurance the parties faced competitive constraints by Life Insurance Corporation, ICICI Prudential Life Insurance Company Ltd, HDFC Standard Life Insurance Company Ltd, SBI Life Insurance Company LTd and Tata AIA Life Insurance Company Ltd and in downstream level by insurance intermediaries like insurance brokers and web aggregators. 


With CCI’s approval order, the parties finally consummated the deal, making Axis Bank a co- promoter of Max Life. This venture will reduce pressure on the life insurance company and diversify its distribution channel. According to Max Life MD and CEO Prashant Tripathy, the deal removed uncertainty over third-party distribution channels and Axis bank as a promoter will make the private lender a permanent stable distribution channel along with deeper tech integration. 



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