HDFC will acquire a controlling stake of 50.8 per cent in Apollo Munich Health Insurance for about Rs 1,347 crore.
Apollo Munich will be later merged with general insurance company HDFC ERGO, part of the HDFC group. HDFC is buying out the entire holding of Apollo Hospitals group in for Rs 1,336 crore, said HDFC chairman Deepak Parekh. It will also buy out 0.4 per cent stake held by employees of Apollo Munich Health Insurance for Rs 10.84 crore.
The deal is subject to regulatory approvals. The entire process is expected to be completed in nine months.
"We had to do two-step transactions since if HDFC Ergo had directly bought Apollo's stake then it would have breached 49 per cent cap on foreign investment in insurance for Munich Re," Parekh said. Munich Re is already HDFC's partner in general insurance company.
Post transaction, Munich Re will continue to hold 49 per cent stake in HDFC ERGO.
To support the transaction with its material benefits for Apollo Munich, Munich Health will pay Rs 294 crore to Apollo Hospitals Enterprises and Apollo Energy in connection with the termination of their joint venture.
The merged entity will have a combined market share of 6.4 per cent in non-life insurance industry with 308 branches in the country. It would also be second largest private insurer in the accident and health segment in the country, HDFC said in a statement.
Apollo Munich will be later merged with general insurance company HDFC ERGO, part of the HDFC group. HDFC is buying out the entire holding of Apollo Hospitals group in for Rs 1,336 crore, said HDFC chairman Deepak Parekh. It will also buy out 0.4 per cent stake held by employees of Apollo Munich Health Insurance for Rs 10.84 crore.
The deal is subject to regulatory approvals. The entire process is expected to be completed in nine months.
"We had to do two-step transactions since if HDFC Ergo had directly bought Apollo's stake then it would have breached 49 per cent cap on foreign investment in insurance for Munich Re," Parekh said. Munich Re is already HDFC's partner in general insurance company.
Post transaction, Munich Re will continue to hold 49 per cent stake in HDFC ERGO.
To support the transaction with its material benefits for Apollo Munich, Munich Health will pay Rs 294 crore to Apollo Hospitals Enterprises and Apollo Energy in connection with the termination of their joint venture.
The merged entity will have a combined market share of 6.4 per cent in non-life insurance industry with 308 branches in the country. It would also be second largest private insurer in the accident and health segment in the country, HDFC said in a statement.
No comments:
Post a Comment