In 2019, Cigna International Corporation, a global leader in health services, increased its stake in its Indian joint venture, Cigna TTK Health Insurance Company Limited. This strategic transaction also involved replacing Cigna’s existing partner, the TTK Group, with the Manipal Group, a premier healthcare provider in India. Majmudar & Partners advised on the regulatory, legal, and governance aspects of this transaction, ensuring compliance with requirements under Indian laws, including requirements of the Insurance Regulatory and Development Authority of India (IRDAI).
Facilitating the Transaction
Majmudar & Partners provided comprehensive legal counsel throughout the transaction, focusing on the following key areas:
- Regulatory Compliance: Ensured the transaction complied with IRDAI regulations, Indian corporate laws and Indian foreign exchange regulations, ensuring smooth approvals and minimal disruption.
- Corporate Structuring and Joint Venture Governance: Advised on restructuring the joint venture, including by drafting and negotiating agreements that outlined the new governance structure, shareholding changes and operational responsibilities.
- Employment and Operational Transitions: Assisted with integration of Manipal Group’s resources and healthcare infrastructure into Cigna’s insurance operations, ensuring compliance with local labor laws and seamless continuity of services.
- Foreign Direct Investment (FDI) Regulations: Advised Cigna on compliance with India’s FDI laws, allowing Cigna to increase its stake to 49%, the maximum foreign investment stake permitted under Indian foreign exchange and insurance regulations in 2019.
Cigna International Corporation’s strategic decision to increase its stake in the Indian joint venture and partner with the Manipal Group underscores the company’s long-term commitment to India’s health insurance market. By combining the healthcare expertise of Manipal with Cigna’s insurance capabilities, this joint venture is well-positioned to offer comprehensive and accessible healthcare solutions to India’s burgeoning middle-class population. Majmudar & Partners played a critical role in ensuring the regulatory compliance and smooth execution of this complex cross-border transaction.
With a track record of successfully managing complex joint ventures, Majmudar & Partners provides expert legal counsel to companies looking to expand their operations in India. Contact us today to learn how we can help you navigate the intricate regulatory landscape and ensure seamless partnerships for your business growth.