Housing Development Finance Corporation Ltd. will buy a majority stake in Apollo Munich Health Insurance Company Ltd. for Rs 1,347 crore a move that paves the way for merging it with its general insurance business HDFC ERGO.
HDFC in the first step will acquire 51.2 percent stake or 18.39 crore shares in Apollo Munich from the Apollo Group for Rs 1,346.84 crore. This transaction will be subject to regulatory approvals from the National Housing Bank, Insurance Regulatory and Development Authority of India, and the Competition Commission of India.
Apollo Munich in the second step shall be merged with HDFC ERGO General Insurance Co. Ltd., in which HDFC owns 50.49 percent while Germany’s Ergo International AG holds the rest.
The shareholders of Apollo Munich will get shares of HDFC ERGO once the proposed merger becomes effective, said a statement issued by HDFC ERGO. As yet, no details have been shared regarding the share swap ratio, etc.
HDFC in a press statement said, “the merged insurance entity on a pro-forma basis has a combined market share of 6.4 percent of the 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 percent.”