Apollo Hospitals up 5% as IRDA approves stake sale in Apollo Munich to HDFC
Shares of Apollo Hospitals Enterprise jumped 5.2 per cent to Rs 1,501.5 per share on the BSE on Thursday after the company said Insurance Regulatory and Development Authority of India (IRDAl) has approved HDFC's bid to acquire 51.2 per cent stake in Apollo Munich Health Insurance Company (AMHI). Competition Commission of India (CCI), and Reserve Bank of India (RBI) have already approved the deal.
"We wish to inform you that AMHI, HDFC ERGO General Insurance Company, and HDFC have received requisite approvals for the said acquisition from CCI, RBI and the last being from IRDAl on January 1, 2020," the company said in a statement. In accordance with the share purchase agreement (SPA), the acquisition of shares by HDFC is expected to be completed by January 9, 2020.
Apollo Hospitals, in June 2019, had accorded the sale of the entire 9.96 per cent equity stake held by it in Apollo Munich Health Insurance Company Ltd.
"In this context, SPA had been executed by and amongst, Apollo Hospitals , HDFC, HDFC ERGO, AMHI, Apollo Energy Company Ltd, Munich Health Holdings AG and other shareholders of AMHI for and in connection with the acquisition of upto 51.2 per cent of shareholding of AMHI by HDFC from AHEL, AECL and other shareholders," it said.
As per reports, HDFC chairman Deepak Parekh had said the deal has two steps-HDFC first acquiring 51.2 percent in Apollo Munich Health and then merging it with HDFC Ergo. Post-acquisition, Munich group's stake in HDFC Ergo will continue to be at 49 percent,
As per reports, HDFC acquired the stake for Rs 1,347 crore.The merged entity (with HDFC Ergo General Insurance) will be a Rs 10,807-crore business and is likely to be the second largest in the market.
At 11:21 am, Apollo Hospitals was trading 4.68 per cent higher at Rs 1493.65, while HDFC gained 0.4 per cent to Rs 2,443.65. In comparison, the benchmark S&P BSE Sensex was up 0.46 per cent at 41,494.94 level.