Money & Banking

HDFC completes the acquisition of 51.2% stake in Apollo Munich Health

Our Bureau Mumbai | Updated on January 09, 2020

Housing Development Finance Corporation (HDFC) has acquired a 51.16 per per cent stake in Apollo Munich Health Insurance Company, which has been renamed HDFC Ergo Health Insurance (HDFC Ergo Health), and will operate as a subsidiary of the mortgage lender.

Anuj Tyagi, Executive Director and Chief Business Officer, HDFC Ergo General Insurance (HDFC Ergo General), has been appointed as the new Managing Director and CEO of HDFC Ergo Health, subject to approval from the IRDAI.

“HDFC has completed the acquisition of 50.80 per cent share of Apollo Hospitals Group in Apollo Munich Health Insurance Company for ₹1,485.14 crore and 0.36 per cent shareholding held by employees for ₹10.67 crore,” HDFC said in a statement on Thursday.

Deepak Parekh, Chairman of HDFC, said: “We welcome the policyholders, channel partners and employees of Apollo Munich to the HDFC family. This presents us the opportunity to continue our growth journey in the insurance space.”

The acquisition has been approved by the Competition Commission of India, the Reserve Bank of India, and the Insurance Regulatory and Development Authority of India.

Merger with HDFC Ergo

HDFC Ergo Health and HDFC Ergo General will soon apply to the National Company Law Tribunal, seeking approval for the merger of both entities. “Post-merger, the resultant entity will be the second-largest private insurer in the accident and health segment in the country.

HDFC had, in June last year, announced plans to acquire a 51.2 per cent stake in Apollo Munich Health Insurance with the aim to later merge it with its general insurance arm, HDFC Ergo.

It was envisaged as a two-stage process, where, in the first stage, Apollo Munich would be held as a subsidiary of HDFC, and in the second stage, it would be merged with HDFC Ergo General Insurance into one entity under the HDFC Ergo brand.

Apollo Munich, a joint venture between Apollo Hospitals Group and Munich Health, closed 2018-19 with a gross written premium of ₹2,194 crore.

HDFC Ergo General Insurance is a joint venture between HDFC and ERGO International, and is the third-largest general insurer in the private sector.

Published on January 09, 2020

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