HDFC Life Acquires Exide Life Insurance for Rs 6,687 Crore

The board of directors of HDFC Life Insurance Company Limited, Exide Industries Limited and Exide Life Insurance Company Limited at their respective meetings held today approved the transaction involving the sale of Exide Life Insurance to HDFC Life. HDFC Life will acquire 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 pay-out of Rs 726 crore, aggregating to Rs 6,687 crore. The process for merger of Exide Life into HDFC Life will be initiated on completion of the acquisition. The entire process, including the acquisition and subsequent merger, is subject to obtaining the relevant regulatory and other approvals. 

The proposed transaction will give customers access to a wider bouquet of products and service touch points. Employees and agents will benefit from a larger, stronger organisation that realises the synergies arising out of complementary business models built on similar ethos. The proposed transaction will accelerate the growth of the agency business of HDFC Life. Exide Life complements HDFC Life’s geographical presence and has a strong foothold in South India, especially in Tier 2 and 3 towns, thus providing access to a wider market. Further, predominantly traditional and protection focussed business, will augment the existing embedded value of HDFC Life by approximately 10 per cent. The embedded value of Exide Life, as on 30th June 2021, is Rs. 2,711 crore and has been reviewed by Willis Towers Watson Actuarial Advisory LLP. HDFC Life’s scale, market-leading digital and product innovation capabilities and prudent risk management strategy will aid in optimising cost, and over time, achieve higher margins for the acquired business. 

Commenting on the proposed transaction, Mr. Deepak S. Parekh, Chairman, HDFC Life said, “This is a landmark transaction, a first of its kind in the Indian life insurance space. It will enhance insurance penetration and further our purpose of providing financial protection to a wider customer base.” 

Ms. Vibha Padalkar, Managing Director and CEO, HDFC Life said, “We believe that this amalgamation can result in value creation for customers, employees, shareholders and distribution partners. It gives us an opportunity to realise synergies arising out of complementary business models, and further bolster our proprietary distribution network.”