Larsen & Toubro Ltd (L&T), through its 100 per cent subsidiary L&T General Insurance, has agreed to acquire around 50 per cent stake in Future Generali India General Insurance for over Rs.500 crore from Kishore Biyani-led Future Group.

L&T is expected to make an official announcement on Tuesday but people with direct knowledge of the acquisition have confirmed the deal.

Future Generali India General Insurance is a joint venture between Italy’s Generali SpA with 26 per cent stake and Future Group 74 per cent.

Pantaloon Retail of the Future Group holds 50 per cent stake of the 74 per cent holding while the Biyani family holds 24 per cent. The details of the deal are yet to be made public. But it is learnt that L&T would pick up 51 per cent stake to gain absolute control of the general insurance company. This deal is part of Future Group’s strategy to cut down its mounting debt and to focus on the organised retail sector. Cash generated from the deal will go towards retiring debt.

Earlier, Pantaloon Retail had announced plans to sell 22.5 per cent stake in Future General India Life Insurance to Industrial Investment Trust Ltd (IITL) to cut its exposure into insurance business. This deal estimated at Rs.300 crore.

On Monday, speculation was rife that L&T Finance Holding would be acquiring the stake from Future Group but later people with direct knowledge of the development said that L&T would acquire the stake.

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