MUMBAI: THE country’s top mortgage lender HDFC Limited said it will buy leading private hospital chain Apollo Hospital’s stake in health insurance company Apollo Munich for Rs 1,336 crore.
Post acquisition, HDFC plans to merge Apollo Munich with HDFC Ergo, its general insurance subsidiary.
HDFC said respective boards on Wednesday approved the deal. HDFC will buy 50.8 per cent shareholding of Apollo Group in Apollo Munich Health Insurance Company and another 0.4 per cent stake from few employees for a consideration of Rs 10.84 crore, subject to regulatory approvals.
To support the transaction with its material benefits for Apollo Munich, Munich Health will pay Rs 294 crore to Apollo Hospitals Enterprise Ltd and Apollo Energy Ltd in connection with the termination of their joint venture, the release said.
“We are glad to pass on the baton of Apollo Munich to a reputed group like HDFC. 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. The funds from the divestment will enable us to focus on investing and growing our core healthcare business,” said Shobana Kamineni, chairperson, Apollo Munich Health Insurance.
HDFC said Apollo Munch is a strong strategic fit and the merger of Apollo Munich with HDFC Ergo will make it the second largest private insurer in the accident and health segment with a market share of 8.2 per cent, and an overall market share of 6.4 per cent in the non-life insurance industry.
HDFC chairman Deepak Parekh said the combined expertise will result in greater product innovation, wider distribution and enhanced servicing capabilities, benefitting 1.2 crore policyholders.
Quantum of the deal
HDFC Limited will buy 50.8 per cent shareholding of Apollo Group in Apollo Munich Health Insurance Company and another 0.4 per cent stake from a few employees for consideration of I10.84 crore, subject to regulatory approvals