Mortgage lender Housing Development Finance Corporation (HDFC) has secured approval from the Competition Commission of India (CCI) to acquire stakes in two insurance companies.
HDFC will be buying an additional stake in HDFC Life Insurance Company and HDFC ERGO General Insurance Company.
These approvals will facilitate the merger of HDFC into HDFC Bank, which is anticipated to be completed by the third quarter of this fiscal year, reported the Press Trust of India via the Business Standard.
Earlier this year, the Reserve Bank also permitted HDFC Bank to acquire more than 50% of HDFC Life Insurance Company and HDFC ERGO General Insurance Company before the merger’s effective date.
As a general insurer, HDFC ERGO is engaged in offering a range of insurance products such as motor, home, cyber, speciality and bespoke insurance to both retail and business customers
Meanwhile, the life insurer’s product portfolio consists of a range of protection, pension, savings, investment, and annuity-related life insurance and investment products.
According to the CCI, HDFC Bank will hold more than 50% of the stake in both insurance companies.
Last April, HDFC Bank agreed to acquire HDFC in a $40bn deal to build a leading financial services company.
The combined entity will have nearly Rs180tn ($219.47bn) in assets.
Following the completion of the transaction, existing HDFC shareholders would own 41% of the bank, making public shareholders the sole owners of HDFC Bank.
For every 25 HDFC shares owned, shareholders will each receive 42 HDFC Bank shares.
