HDFC Life will acquire a 100 per cent stake in Exide Life Insurance from Exide Industries through the issuance of 87 million shares at an issue price of ₹685 per share.
HDFC Life said on Friday it will acquire Exide Life Insurance, the life insurance unit of battery maker Exide Industries, in a deal worth ₹6,687 crore. This is the biggest insurance deal in the country and will accelerate the growth of the agency business of HDFC Life Insurance. “The board of directors of HDFC Life Insurance Company (HDFC Life), Exide Industries Ltd (Exide Industries) and Exide Life Insurance Company Ltd (Exide Life)… approved the transaction involving the sale of Exide Life Insurance to HDFC Life,” HDFC Life said in a release.
Here’s what you need to know about the HDFC Life and Exide Life Insurance deal:
1. HDFC Life will acquire a 100 per cent stake in Exide Life Insurance from Exide Industries.
2. This will be through the issuance of 87 million shares at an issue price of ₹685 per share.
3. There will be a cash payout of ₹726 crore aggregating to ₹6,687 crore as well.
4. The process for the merger of Exide Life into HDFC Life will be initiated on completion of the acquisition.
5. This process, including the acquisition and subsequent merger, is subject to obtaining the relevant regulatory and other approvals.
6. HDFC Life chairperson Deepak Parekh said the deal with Exide Life would enhance insurance penetration and further his company’s purpose of providing financial protection to a wider customer base.
7. Exide Life had a customer base of 1.2 million and assets of more than ₹187.81 billion, as of June 30.
8. Exide Life has a total premium income of over ₹33.25 billion for the financial year 2020-21.
9. Exide Industries has made a total investment of ₹16.8 billion in its life insurance business to date.
10. HDFC Life’s shares fell 2.2 per cent at 9:53am and Exide Industries jumped as much as 15 per cent, the most since 2011.
(With agency inputs)
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