Janashakthi Group (JXG) has agreed to acquire the whole of Continental Insurance Lanka Limited from Melstacorp for 5,144,636,012 rupees, according to a disclosure made to the Colombo Stock Exchange on Thursday.
The transaction will be executed in phased tranches rather than a single transfer. JXG will initially acquire an 81 percent controlling stake in Continental Insurance Lanka, followed by a further 9 percent during the first year and the remaining 10 percent in the second year.
The total purchase price remains subject to potential conditional adjustments provided for under the sale agreement, the company said.
Both Janashakthi and Melstacorp said further disclosures would be made as the acquisition progresses.
Market reaction
Investors took the announcement as favourable to the buyer. JXG shares closed up 3.54 percent at 11.70 rupees. Melstacorp, the seller, closed marginally lower, down 0.13 percent at 186.25 rupees.
The phased structure means control passes immediately while full ownership is completed over two years, an arrangement that spreads the cash outlay and typically ties the remaining tranches to agreed conditions being met.
Janashakthi listed on the Colombo bourse under the JXG ticker earlier this year. The group has been reshaping its holdings since, and issued a clarification to the exchange over a preferential allotment during that period.
Melstacorp is a diversified conglomerate with interests spanning beverages, telecommunications, plantations and financial services. Neither company has indicated what the sale means for Continental Insurance Lanka’s management or branding.
