Mumbai:
Housing Development Finance Corporation (HDFC) and its subsidiary HDFC ERGO have received all the regulatory approvals to acquire up to 51.2 per cent stake in Apollo Munich Health Insurance.
In a regulatory filing on Thursday, HDFC said the last required clearance was provided by Insurance Regulatory and Development Authority of India (IRDAI) on Wednesday (January 1).
The National Housing Bank, Competition Commission of India (CCI) and the Reserve Bank of India (RBI) had already given their approvals for the deal.
In June 2019, HDFC had announced entering an agreement for acquiring up to 51.2 per cent of equity share capital of Apollo Munich with HDFC ERGO General Insurance Company, a subsidiary of HDFC.
Post the completion of the proposed acquisition, Apollo Munich would be merged with HDFC ERGO, subject to the approval of the Mumbai bench of the National Company Law Tribunal.
In June 2019, HDFC had announced it would acquire Apollo Hospitals Group's entire 50.8 per cent stake in Apollo Munich Health Insurance for Rs 1,336 crore and 0.4 per cent stake held by a few employees for a consideration of Rs 10.84 crore. To support the transaction, Munich Health will pay Rs 294 crore to Apollo Hospitals Enterprise and Apollo Energy in connection with the termination of their joint venture.
Further, under the agreement, Apollo Hospitals Enterprise Ltd would sell its entire stake of 9.96 per cent in Apollo Munich.
The merged insurance entity will have a combined market share of 6.4 per cent of non-life insurance industry, with 308 branches across the country. This also makes the combined entity the second-largest private insurer in the accident and health segment, with a market share of 8.2 per cent, the company had said.
Shares of Apollo Hospitals surged post announcement of the approvals. Its shares on the BSE settled at Rs 1,493.35 on Thursday, higher by Rs 66.45 or 4.66 per cent from its previous close.
Shares of HDFC on the BSE settled at Rs 2,466.25, higher by Rs 32.50 or 1.34 per cent from its previous close.