HDFC Life to acquire Exide Life for ₹6,687 crore

The life insurance company will acquire 100% stake in Exide Life from Exide Industries by issuing 8,70,22,222 shares at the issue price. ₹685 per share plus cash payment ₹726 crore in total ₹6,687 crores. Exide Life merger process HDFC Life The acquisition will be started after completion.

“The underlying value of Exide Life as on June 30, 2021 is ₹2,711 crore and reviewed by Willis Towers Watson Actuarial Advisory LLP. HDFC Life’s scale, market-leading digital and product innovation capabilities and prudent risk management strategy will help optimize costs and achieve higher margins for the acquired business over time.

HDFC Life further said that the proposed transaction will accelerate the growth of its agency business. In addition, a good quality, primarily traditional and security focused business, will increase HDFC Life’s existing embedded value by around 10%. The company expects Exide Life to have a strong penetration in South India, especially in Tier 2 and Tier 3 cities, to provide a wider market reach.

Commenting on the proposed transaction, Deepak Parekh, Chairman, HDFC Life said, “This is a historic first of its kind transaction in the Indian life insurance sector. This will increase insurance penetration and further our objective of providing financial protection to a wider customer base.”

The entire process, including the acquisition and subsequent merger, is subject to obtaining relevant regulatory and other approvals.

“We believe that this amalgamation can result in value creation for customers, employees, shareholders and distribution partners. This allows us to realize the synergies arising out of the complementary business model,” said Vibha Padalkar, MD and CEO, HDFC Life. Gives us an opportunity to further strengthen our proprietary distribution network.