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HDFC to buy majority stake in Apollo Munich

MUMBAI: HDFC will acquire a majority stake in Apollo Munich Health Insurance for Rs 1,347 crore following a handle the company's promoter Apollo Hospitals team. Once it is approved by way of the housing and insurance coverage regulators and the contest fee, HDFC plans to merge the well being insurer with its personal non-life subsidiary HDFC Ergo.

Announcing the acquisition, HDFC chairman Deepak Parekh said that an immediate acquisition of Apollo Munich by way of HDFC Ergo would lead to a breach of foreign holding limits as HDFC's partner Ergo is part of the Munich Re team, which holds 49% in Apollo Munich and somewhat over 48% in HDFC Ergo. Insurance laws treat foreign companions' investments in the mum or dad company as an indirect shareholding.

Apollo Munich Health Insurance chairperson and Apollo Hospital Enterprise vice-chairman Shobana Kamineni said that the proceeds of the sale can be used for de-leveraging by way of bringing down team debt and development new hospitals. The Apollo team was once started by way of Prathap C Reddy and the medical insurance three way partnership was once promoted by way of Kamineni.

HDFC will acquire 50.eight% from the Apollo Hospitals team for Rs 1,336 crore and can buy out the 0.4% stake being held by way of the workers for Rs 10.eight crore.

German insurer Munich Health pays Rs 294 crore to Apollo Hospitals Enterprise and Apollo Energy for terminating their three way partnership, Parekh said. The merger will building up HDFC Ergo's marketplace share from five.1% to 6.4% and can considerably building up its share in the medical insurance pie, the non-life insurer's MD & CEO Ritesh Kumar said.

This is the 3rd M&A transaction in medical insurance in fresh months. In March, Star Health and Allied was once bought by way of a consortium that integrated private equity traders for Rs 6,500 crore. Earlier this month, the Manipal team changed TTK in Cigna TTK Health Insurance.

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