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MUMBAI: HDFC will acquire a majority stake in Apollo Munich Health Insurance for Rs 1,347 crore following a maintain the corporate's promoter Apollo Hospitals crew. Once it's approved by way of the housing and insurance regulators and the competition fee, HDFC plans to merge the well being insurer with its own non-life subsidiary HDFC Ergo.

Announcing the acquisition, HDFC chairman Deepak Parekh said that a right away acquisition of Apollo Munich by way of HDFC Ergo would lead to a breach of foreign conserving limits as HDFC's partner Ergo is part of the Munich Re crew, which holds 49% in Apollo Munich and a little over 48% in HDFC Ergo. Insurance regulations treat foreign companions' investments in the mum or dad company as an indirect shareholding.

Apollo Munich Health Insurance chairperson and Apollo Hospital Enterprise vice-chairman Shobana Kamineni said that the proceeds of the sale could be used for de-leveraging by way of bringing down crew debt and development new hospitals. The Apollo crew used to be began by way of Prathap C Reddy and the medical insurance three way partnership used to be promoted by way of Kamineni.

HDFC will acquire 50.eight% from the Apollo Hospitals crew for Rs 1,336 crore and can purchase out the 0.four% stake being held by way of the employees for Rs 10.eight crore.

German insurer Munich Health can pay Rs 294 crore to Apollo Hospitals Enterprise and Apollo Energy for terminating their three way partnership, Parekh said. The merger will building up HDFC Ergo's marketplace share from five.1% to 6.four% and can significantly building up its share in the medical insurance pie, the non-life insurer's MD & CEO Ritesh Kumar said.

This is the third M&A transaction in medical insurance in recent months. In March, Star Health and Allied used to be received by way of a consortium that incorporated private fairness buyers for Rs 6,500 crore. Earlier this month, the Manipal crew changed TTK in Cigna TTK Health Insurance.

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