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HDFC Life To Acquire Exide Life Insurance For Rs 6,687 Crore

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HDFC Life Insurance Co. will fully acquire Exide Life Insurance Co. for Rs 6,687 crore.

Of this, Rs 726 crore will be payable in cash and the balance by way of issuing its 8.7 crore equity shares at Rs 685 apiece to Exide Industries Ltd., the holding company for Exide Life, according to HDFC Life’s exchange filing. The deal closing is pending approvals from regulators.

The process for merger of Exide Life into HDFC Life will be initiated on completion of the acquisition — expected to be completed before June 30, 2022.

“The transaction can result in value creation for customers, employees, shareholders and distribution partners. This transaction will provide an opportunity for HDFC Life and the target [Exide Life] to realise synergies arising out of complementary business models,” the filing said.

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Exide Life, according to the filing, reported a turnover (total premium) for FY21 at Rs 3,325 crore compared with Rs 3,220 crore in FY20 and Rs 2,886 crore in FY19.

Exide Life, with a “strong foothold” in south India, especially in tier 2 and 3 towns, complements HDFC Life’s geographical presence, and will provide access to a wider market, the filing said. It will help accelerate the growth of the agency business of HDFC Life as well as strengthen other distribution channels including broker, direct and cooperative banks.

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Shares of HDFC Life fell as much as 4.2% to 727.20 in opening trade, while Exide Industries jumped as much as 10% to Rs 196.05. So far this year, HDFC Life’s stock has risen 12.5% versus 22.1% for S&P BSE Sensex.

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