Sri Lanka's Janashakthi has agreed to purchase full ownership of Continental Insurance Lanka Limited from Melstacorp through a phased acquisition valued at over Rs5 billion.

Janashakthi (JXG) has entered into a share purchase agreement with Melstacorp to acquire full ownership of Continental Insurance Lanka Limited for Rs5,144,636,012, according to a disclosure filed with the Colombo Stock Exchange on Wednesday.

The transaction will be completed in three distinct phases rather than a single acquisition. Janashakthi will first obtain an 81 percent controlling stake in the insurance company, with subsequent purchases of 9 percent after the first year and the remaining 10 percent in the second year. This phased approach allows both parties to manage the transition systematically across the acquisition period.

The final purchase price may be subject to adjustments based on conditions outlined in the sale agreement between the two parties. Both Janashakthi and Melstacorp indicated they would provide additional updates as the acquisition progresses through its various stages.

Market reaction to the announcement was mixed. Janashakthi's shares gained 3.54 percent to close at Rs11.70 on the day of the disclosure, suggesting investor optimism about the acquisition. Melstacorp shares, however, declined marginally by 0.13 percent, closing at Rs186.25.