In an apparent Zee Business newsbreak confirmed, HDFC Life Insurance on Friday announced the acquisition of 100 per cent of the share capital of Exide Life Insurance Company for Rs 6,687 crore.

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Zee Business Special Correspondent Anurag Shah on Thursday had reported that HDFC Life Insurance would take over Exide Life Insurance business with around 100 per cent stake acquisition.

HDFC Life informed exchanges on Thursday that the company will acquire a 100 per cent stake in Exide Life Insurance from Exide Industries via issuance of 8,70,22,222 shares at an issue price of Rs 685 per share and a cash payout of Rs 726 crore, which aggregates to Rs 6,687 crore.

The board of directors of HDFC Life Insurance Company (HDFC Life), Exide Industries Ltd (Exide Industries) and Exide Life Insurance Company Ltd (Exide Life) approved the transaction involving the sale of Exide Life Insurance to HDFC Life, the company also said in a filing to exchanges.

The process for the merger of Exide Life into HDFC Life will be initiated on completion of the acquisition, the private insurer said. The entire process, including the acquisition and subsequent merger, is subject to obtaining the relevant regulatory and other approvals, the company informed exchanges.

Moreover, the approval of shareholders for the proposed Issue is sought to be obtained at an extraordinary general meeting to be held on September 29, 2021, it further said in filing.

Mentioning that the proposed transaction will accelerate the growth of the Agency business of HDFC Life, the company states that Exide Life complements HDFC Life’s geographical presence and has a strong foothold in South India, especially in Tier 2 and 3 towns, providing access to a wider market.

HDFC Life’s scale, market-leading digital and product innovation capabilities and prudent risk management strategy will aid in optimizing cost and over time, achieve higher margins for the acquired business, the insurer said in a statement.

HDFC Life Insurance Company Limited established as a joint venture between HDFC Ltd., India’s leading housing finance institution and Standard Life Aberdeen, a global investment company.

The stock opened top laggard during today’s trade, and touched a day’s low of Rs 728.55 per share, at around 10:20 am, it is trading down near 3 per cent to Rs 737.6 per share on the BSE as compared to 0.37 per cent rise in the S&P BSE Sensex.