The Competition Commission of India (CCI) on Tuesday approved the acquisition by HDFC Life Insurance Company of 100% shareholding in Exide Life Insurance Co Ltd, a unit of battery maker Exide Industries Ltd.
The deal was inked for ₹6,687 crore, allowing the country’s most valuable private insurer to bolster its presence in south India.
The proposed combination involves acquisition of fully paid-up equity shares, representing 100% of target by the acquirer from Exide Industries Ltd. After completion of the share acquisition, Exide Life (which will be a wholly owned subsidiary of HDFC Life) is proposed to be merged with HDFC Life.
Of the total deal value, HDFC Life will pay ₹725.98 crore in cash and the rest by issuing 87 million shares at ₹685 apiece to Exide Industries.
The purchase will help HDFC Life deepen its presence in south India, especially smaller towns, complementing its market footprint and it will also provide access to a wider market.
The acquisition is expected to be completed by next June and is subject to regulatory and other approvals. The merger process of Exide Life into HDFC Life will be initiated upon completion of the acquisition.
Bengaluru-based Exide Life has a customer base of around 1.19 million and assets of over ₹18,781 crore as of 30 June. Exide Life’s total premium income rose to ₹3,325 crore in the year to 31 March from ₹3,220 crore in the previous year.
The deal, which comes at a time state-owned Life Insurance Corp. of India is preparing to go public, may accelerate consolidation among the 24 life insurers in India. Earlier this year, India cleared a plan to raise foreign direct investment in insurance to 74% from 49% to help local insurers meet their growing capital requirements.
HDFC Life is registered with the Insurance Regulatory and Development Authority of India (the IRDAI). It offers a range of individual and group life insurance solutions including participating, non-participating and unit linked insurance products. Its product portfolio comprises of various life insurance and investment products such as protection, pension, savings, investment, and annuity. HDFC Life has two wholly owned subsidiaries, namely, HDFC Pension Management Company Limited and HDFC International Life and Re Company Limited.
Exide Life is also a registered life insurance company with the IRDAI. It offers various individual and group life insurance products including protection plans (term insurance, child insurance plans), savings and investment plans (including ULIPs), retirement and pension plans. It does not have any subsidiaries.
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