HDFC Life Insurance on Sept 3 announced that its board has approved acquisition of 100% of the share capital of Exide Life Insurance Company Limited for a total consideration of ₹6,687 crore.
Of this, Rs 726 crore will be payable in cash and the balance by way of issuing its 8.7 crore equity shares at Rs 685 apiece to Exide Industries Ltd., the holding company for Exide Life, according to HDFC Life’s exchange filing, reported BloombergQuint. The deal closing is pending approvals from regulators.
The deal will help HDFC Life, the country’s largest private-sector insurer, strengthen its foothold in south India. India’s life insurance penetration stood at 2.82% in 2019, according to the latest annual report from the country’s insurance regulator.
The closure of the proposed transaction will be subject to approval by relevant regulators including the Insurance Regulatory and Development Authority of India (IRDAI), Competition Commission of India (CCI), National Company Law Tribunal (NCLT), and stock exchanges.
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“This is a landmark transaction, first of its kind, in the Indian life insurance space. It would enhance insurance penetration and further our purpose of providing financial protection to a wider customer base,” HDFC Life Chairman Deepak Parekh said in the release.
Vibha Padalkar, MD & CEO, HDFC Life said, “We believe that this amalgamation can result in value creation for customers, employees, shareholders and distribution partners. It gives us an opportunity to realize synergies arising out of complementary business models, and further bolster our proprietary distribution network”.
“This transaction is testimony to the reputation that Exide Life insurance has built of being a well-managed company. We look forward to working closely with the HDFC life team on the proposed transaction. Being part of one of India’s most respected life insurance companies will certainly benefit our customers, employees, agents and partners,” said Kshitij Jain, MD and CEO of Exide Life Insurance.
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