Private sector insurer HDFC Life on Thursday informed that it has received final approval for the merger of Exide Life Insurance into the company from the regulator, IRDAI (Insurance Regulatory and Development Authority of India). The appointed date of the acquisition is April 1, 2022, and it shall be effective from the end of the day on October 14, 2022, the company said in its exchange filing.
On January 1, HDFC Life informed that it had completed the acquisition of a 100 per cent stake in Exide Life from Exide Industries through the 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 that after the acquisition, Exide Life will operate as a wholly-owned subsidiary of HDFC Life. Exide Industries now holds 4.1 per cent stake in HDFC Life.
With this merger, HDFC Life aims to strengthen its presence in South India and across Tier 2 and Tier 3 locations. Exide Life’s agency-based distribution model, a strong presence in South India, and experience across tier 2 and tier 3 locations complements HDFC Life and will help expand its market and bolster its proprietary distribution, the company said.
Speaking on the merger, HDFC Life MD and CEO Vibha Padalkar said this first-of-its-kind acquisition is a reflection of the company’s intent to build a stronger India by providing a financial safety net to more people. He said the company recognises that the life insurance market in India is multi-faceted, where one solution might not fit all.
“Different distribution channels and a varied product mix help cater to different customer cohorts across the diverse Indian geography, and this acquisition is an important milestone towards our strategic objective of bringing more people into the fold of financial protection,” the CEO said.
