Munich Re's Ergo to raise stake in JV with HDFC for $169 million

Munich Re's insurance unit Ergo has agreed to buy nearly 23 per cent more in its India joint venture with Housing Development Finance Corp for $169.03 million, in the latest deal in the country's insurance sector after foreign ownership rules were eased this year.

After the deal, Ergo's stake in HDFC Ergo General Insurance Co will go up to about 49 per cent - the maximum foreign holding allowed in Indian insurance companies under the new rules - the companies said on Thursday.

India, which previously capped foreign stake in insurance companies at 26 per cent, raised the ceiling in March, leading to a flurry of deals in the sector.

HDFC, the top mortgage lender, will own 50.7 per cent of HDFC Ergo after the deal.

HDFC's life insurance joint venture partner, Britain's Standard Life plc, said in August it was seeking to raise its stake in that joint venture to 35 per cent from 26 per cent for 169 million pounds ($252.20 million).