New Delhi: Private sector insurer HDFC Life Insurance Company Ltd on Friday said it will acquire 100 per cent stake in Exide Life Insurance from Exide Industries for Rs 6,687 crore.
Subject to regulatory approvals, Exide Life will be merged with HDFC Life.
“HDFC Life will acquire 100 per cent stake in Exide Life Insurance from Exide Industries via issuance of 8,70,22,222 shares at an issue price of Rs 685 per share and a cash payout of Rs 726 crore aggregating to Rs 6,687 crore,” the company said in a stock exchange filing.
AZB and Partners acted as the legal advisor to HDFC Life and Trilegal was the legal advisor to Exide Life and Exide Industries.
HDFC Life, in a statement, said the proposed transaction will accelerate the growth of its agency business as well as strengthen other distribution channels including broker, direct and cooperative banks.
Deepak Parekh, Chairman, HDFC Life, termed the deal as landmark and first of its kind.
“It would enhance insurance penetration and further our purpose of providing financial protection to a wider customer base,” he said.
The HDFC Life statement said the acquisition will give customers access to a wider bouquet of products and service touch points. Employees and agents will benefit from a larger, stronger organisation that realises the synergies arising out of complementary business models built on similar ethos, it further said.
While Exide Industries stock traded 6.65 per cent higher at Rs 190.10 a piece on the BSE at 1.21 PM, shares of HDFC Life were down 3.12 per cent at Rs 735.10.
Exide Life Insurance is a 100 per cent owned subsidiary of Exide Industries Ltd and a profitable life insurance company. The total investment of the Exide Industries in Exide Life stands at Rs 1,679.59 crore.