Mumbai: Mortgage major HDFC on Wednesday announced acquisition of majority stake in Apollo Munich Health Insurance from the Apollo Hospitals Group and Munich Health for Rs 1,347 crore and will merge the company with its arm HDFC Ergo General Insurance.
HDFC will acquire 50.8 percent from the Apollo Hospitals group for Rs 1,336 crore and will buyout the 0.4 percent stake being held by the employees for Rs 10.84 crore.
German insurer Munich Health will pay Rs 294 crore to Apollo Hospitals Enterprise and Apollo Energy for terminating their joint venture, HDFC chairman Deepak Parekh said.
The merged entity will have a combined market share of 6.4 percent in the non-life insurance industry, with 308 branches and a business of Rs 10,807 crore, he said.
"The transaction will strengthen our 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," Parekh told reporters.
"We are sure that the new shareholder will continue to nurture and scale the business to greater heights and confident that all stakeholders will be positively impacted," Shobana Kamineni, chairperson of Apollo Munich Health Insurance and vice-chairperson of Apollo Hospitals Enterprises, was quoted as saying in a statement issued by HDFC.
The acquisition will be subject to regulatory approvals by the National Housing Bank (NHB), Insurance Regulatory and Development Authority (Irdai) and the Competition Commission, while merger of Apollo Munich with HDFC Ergo will be subject to approvals from the shareholders, the National Company Law Tribunal (NCLT), and final approval of Irdai, he said.
Parekh said he expects the deal to be closed over the next month and all the employees will be retained post merger.
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