HDFC Ltd to acquire 50.8% stake in Apollo Munich Health Insurance for Rs 1,336 crore from Apollo Hospitals Group
Mumbai : India’s leading provider of housing finance HDFC Limited on Wednesday announced that it will acquire the entire 50.8% shareholding of Apollo Group, in Apollo Munich Health Insurance Company Ltd. for a consideration of Rs. 1,336 crore and 0.4% shareholding held by a few employees for a consideration of Rs. 10.84 crore, subject to regulatory approvals. Post-acquisition of the shares by HDFC, Apollo Munich shall be merged with its general insurance subsidiary, HDFC ERGO General Insurance Company Limited subject to all regulatory, shareholders & other approvals. To support the transaction with its material benefits for Apollo Munich, Munich Health will pay Rs 294 crore to Apollo Hospitals Enterprise Ltd and Apollo Energy Ltd in connection with the termination of their joint venture.
The proposed transaction brings together two large insurance players with complementary capabilities. The merged insurance entity on a pro-forma basis has a combined market share of 6.4% of non-life insurance industry, with 308 branches across the country. This also makes the combined entity the second largest private insurer in the accident & health segment with a market share of 8.2%. The proposed merger is expected to result in significant benefits to policy holders and other stake holders with an enhanced product suite, touch points, technology innovation, as also via scale based synergies.
The proposed share acquisition will be subject to regulatory approvals by National Housing Bank (NHB), Insurance Regulatory and Development Authority of India (IRDAI) and Competition Commission of India (CCI). The subsequent merger of Apollo Munich with HDFC ERGO would be subject to approval of the shareholders, National Company Law Tribunal (NCLT), and final approval of IRDAI.
“This transaction will strengthen the HDFC group’s commitment to the growing health insurance segment. The combined expertise of HDFC ERGO and Apollo Munich will result in greater product innovation, wider distribution and enhanced servicing capabilities, benefiting their 1.2 crore policy holders” Mr. Deepak Parekh, Chairman of HDFC Ltd and HDFC ERGO General Insurance said.