Private sector life insurer HDFC Life will soon be acquiring a 100 percent stake in Exide Life Insurance Company for Rs 6,887 crore.
Post the regulatory approvals, Exide Life Insurance will be merged with HDFC Life.
Earlier, HDFC Life had shown interest in acquiring Max Life but that deal did not go complete because of regulatory objections .
Out of the Rs 6,887 crore to be pod for acquisition, Rs 725 crore will be paid in cash, and the balance will be issued by 87.02 million equity shares of face value of Rs 10 of the company issued at a price of Rs 685 per share to Exide Industries Limited.
After this acquisition, Exide Industries will have a hold on 4.1 percent stake in HDFC Life and mortgage lender HDFC Ltd, will hold 49.9 percent stake in HDFC Life.
In its official communique, HDFC Life said, “The proposed transaction will accelerate the growth of the agency business of HDFC Life. Exide Life complements HDFC Life’s geographical presence and has a strong foothold in South India, especially in Tier 2 and 3 towns, thus providing access to a wider market”.