New Delhi
HDFC Ltd will acquire Apollo Hospitals Group’s entire 50.8% stake in Apollo Munich Health Insurance Ltd and 0.4% stake held by a few employees for ₹1,336 crore and ₹10.84 crore, respectively, the company said.
The combined entity, which will have a gross premium of ₹10,807 crore, will have a market share of 6.4% in the country’s non-life insurance market. The merger is subject to regulatory approvals.
Founded in 2007, Apollo Munich Health Insurance is a 51:49 joint venture between Chennai-based Apollo Hospitals and German reinsurer Munich Re.
In February, Bloomberg reported that Apollo Hospitals founders, Prathap C Reddy and his family, were looking to sell their entire 51% stake in the health insurance arm to pare ₹3,430 crore debt of India’s second largest hospital chain. The proceeds, according to Bloomberg sources, would be used to repay part of the debt raised by pledging Apollo Hospital’s equity as collateral.
This marks the third health insurance deal in the market. Private equity firm True North bought Max India’s controlling stake in Max Bupa Health Insurance Company Ltd in December 2018 for ₹2,000 crore. Earlier in August of that year, Star Health and Allied Insurance Co. Ltd, India’s largest standalone health insurer, said private equity firms WestBridge Capital and Madison Capital and billionaire investor Rakesh Jhunjhunwala had jointly agreed to buy Star Health.
HDFC ERGO General Insurance Company, a joint venture between HDFC Ltd. and ERGO International AG, the primary insurance entity of the Munich Re Group, has been on the lookout for a health insurer for the last two years. In 2017, Deepak Parekh, chairman of HDFC group, told Mint that it made sense to have a standalone health company as part of the general insurance company. “We don’t want to create a new insurance company,” he had said.
