https://pixabay.com/photos/cash-currency-financial-investment-3829601/HDFC Life has agreed to buy a 100% stake in Exide Life Insurance from Exide Industries in a deal worth $915.5m (INR66.87bn).
This transaction involves the issuance of 8,70,22,222 shares at INR685 apiece and a cash payment of INR7.26bn.
The deal awaits approval from regulators and shareholders. Upon completion of the deal, Exide Life will be merged into HDFC Life.
Through this deal, HDFC Life aims to speed up the growth of its Agency business.
The two companies are said to have complementary business models, with the combination said to offer customers access to a broader range of offerings and service touch points.
Exide Life chairman Rajan Raheja said: “The focus of Exide Industries has always been to enhance the value for its stakeholders.
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By GlobalData“The proposed transaction is another step taken by Exide to meet above stated objective.”
Exide Life has a strong presence in South India, mainly in Tier 2 and 3 towns.
Tas of 30 June 2021, the embedded value of Exide Life stood at INR27.11bn. The firm distributes its products through various channels including agency, bancassurance, corporate agency & broking, direct channel and online.
Its agency channel includes over 36,700 advisers and has operations across India through a network of more than 200 branches.
HDFC Life chairman Deepak Parekh called the deal a ‘landmark’ transaction and the ‘first of its kind’ in India’s life insurance industry.
Commenting on the acquisition, HDFC Life MD and CEO Vibha Padalkar said: “It gives us an opportunity to realise synergies arising out of complementary business models, and further bolster our proprietary distribution network.”
HDFC Life is a long-term life insurance solutions provider, which provides individual and group insurance solutions.
The firm had 37 individual and 13 group products as well as seven optional rider benefits as of 30 June 2021.
In a separate development in the Indian insurance space, Aon acquired a 100% stake in Aon India Insurance Brokers.
Aon previously owned a 49% stake in Aon India Insurance Brokers, which it acquired from Catamaran Ventures in 2020.
The business was then called Anviti Insurance Brokers and was renamed to Aon India Insurance Brokers in June this year.
Aon took sole ownership of the business by acquiring the remaining 51% holding from Catamaran Ventures.
