Exide Industries today informed that it has decided to divest it’s entire life insurance business stake to HDFC Life Insurance Company.
Key points to note –
- Total transaction value is Rs 6,687 crore. Of this Rs 726 crore is upfront cash and balance as shares in HDFC Life Insurance at Rs 685/ share. Post the transaction, Exide Industries will hold a 4.1 per cent stake in HDFC Life
- Exide informed that it has invested a total of Rs 1,679 crore in life insurance business till date
- The transaction is subject to necessary approvals and is expected to conclude by June 30, 2022
It seems a step in the right direction for Exide Industries as it implies a greater focus towards core businesses of batteries. Do also refer a related topic- Exide exploring to enter into lithium-ion cell manufacturing. Already has a JV for technical know-how.
Many investors in any case were not very comfortable about Exide’s insurance business, especially lately as the industry is getting consolidated towards few larger players.
For HDFC, it’s business as usual and the transaction is focused towards increasing scale and hence market share. In terms of size, valuation wise it’s about 4.3% of HDFC’s current valuation of Rs 1,53,000 crore.
On January 1, 2022, HDFC Life announced the completion of the acquisition of Exide Life Insurance Company Limited after receiving all the necessary regulatory approvals.
Exide Life became a wholly owned subsidiary of HDFC Life effective January 1, 2022. Merger of Exide’s business into HDFC Life will be initiated shortly.
https://www.bseindia.com/xml-data/corpfiling/AttachLive/b2676daf-0bca-475d-94d5-515556855265.pdf
HDFC Life on October 14, 2022 announced completion of Exide Life merger.