Housing Development Finance Corporation Ltd (HDFC) has received approval from Insurance Regulatory and Development Authority of India (Irdai) to acquire a majority shareholding in Apollo Munich Health Insurance. The mortgage lender and its subsidiary HDFC ERGO have received all requisite approvals to acquire 51.2 per cent stake in Apollo Munich Health Insurance, HDFC said in filing to exchanges.
Established in 2007, Apollo Munich Health Insurance is a joint venture between Chennai-based Apollo Hospitals and German reinsurer Munich Re Group.
"HDFC and HDFC Ergo have received all requisite approvals for the acquisition including competition commission of India (CCI), Reserve Bank of India and the last being from Irdai on 1 January," HDFC said in a regulatory filing.
Post the completion of the proposed acquisition, Apollo Munich will be merged with and into HDFC Ergo, subject to approval from the Mumbai bench of National Company Law Tribunal, it added.
In June 2019, HDFC had announced it would acquire Apollo Hospitals Group's entire 50.8 per cent stake in Apollo Munich Health Insurance for Rs 1,336 crore and 0.4 per cent stake held by a few employees for a consideration of Rs 10.84 crore. To support the transaction, Munich Health will pay Rs 294 crore to Apollo Hospitals Enterprise and Apollo Energy in connection with the termination of their joint venture.
A share purchase agreements (SPAs) in this regards were signed among HDFC ERGO General Insurance, HDFC Ltd, Apollo Munich Health Insurance (AMHI), Apollo Hospitals, Apollo Energy Co Ltd, Munich Health Holdings AG and other shareholders of AMHI. The SPAs were subject to approvals from CCI, RBI, and Irdai besides other regulatory approvals and subsequent merger of AMHI with HDFC ERGO.
The merged insurance entity will have a combined market share of 6.4 per cent 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 and health segment, with a market share of 8.2 per cent, the company had said.
Boosted by the development, shares of HDFC closed Thursday's trade at Rs 2,466.20 apiece, up 1.33 per cent, on the Bombay Stock Exchange.
By Chitranjan Kumar