HDFC Life to acquire Exide Life Insurance
Published On: Friday, September 3, 2021 | By: Team KnowMyStock
The HDFC Life today(3rd Sept.2021) said it will acquire a 100 percent stake in Exide Life Insurance Company for Rs 6,887 crore from Exide Industries Ltd (EIL) and subsequently, it will be merged with HDFC Life, subject to regulatory approvals. This marks one of the first and the largest acquisitions in the life insurance space, which has 23 private players and one state-owned insurer - Life Insurance Corporation (LIC). Previously, HDFC Life had intended to acquire Max Life but the deal did not go through because of regulatory hurdles. Experts said this deal will, however, is not expected to face any such regulatory hurdles.
Earlier, Reliance Capital, the NBFC arm of the Anil Dhirubhai Ambani Group, had acquired the entire stake in AMP Sanmar from Australian insurer AMP and the Sanmar group in October 2005 for a little over Rs 100 crore. HDFC Life’s proposed acquisition will mark the first acquisition in the past 16 years in the life insurance space.
Of the Rs 6,887 crore that HDFC Life will be paying to acquire Exide Life Insurance, Rs 725 crore will be payable in cash, and the balance by issuing 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, the holding company of Exide Life Insurance. EIL's total investment in Exide Life as on date was Rs 1679.59 crore.
Post the acquisition, Exide Industries will hold a 4.1 per cent stake in HDFC Life and mortgage lender HDFC Ltd, which holds 49.9 per cent stake in HDFC Life, will see its stake come down to 47.9 per cent.
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