‘’Ergo hikes HDFC JV stake to 48.7% for Rs 1,122cr’’

German insurer Ergo has agreed to pay HDFC, the majority partner in their non-life joint venture, Rs 1,122 crore for hiking its stake from 25.84% to 48.72%. The proposed deal values HDFC Ergo General Insurance at Rs 4,900 crore.

A statement issued by the two companies said under the agreement signed between them, Ergo will buy 12.33 crore shares of HDFC Ergo at Rs 90.97 apiece. This will result in HDFC’s stake coming down from 73.63% to 50.73%. HDFC Ergo will continue to be a subsidiary of HDFC.

“The transaction is subject to receipt of all necessary approvals, including but not limited to approvals from the Insurance Regulatory & Development Authority of India, the Competition Commission of India and the Foreign Investment Promotion Board,“ the statement said. This is the second round of value unlocking by HDFC in the insurance sector. Earlier, the company had entered into two deals to sell stake in the life insurance joint venture -HDFC Standard Life -to partner Standard Life and to the Azim Premji Trust. The last deal valued the company at Rs 19,000 crore.

HDFC Ergo is the fourth largest private non-life insurance company in India. For 2014-15, the company recorded premium income of Rs 3,257 crore and a net profit of Rs 104 crore. The joint venture has grown 12-fold from the time Ergo stepped in to replace US insurer Chubb as the joint venture partner with HDFC in 2008.

 

Source :-   The Times of India (Mumbai)

Date    :-   18th  December, 2015

 

 

 

 

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