Board of Directors at Max Financial Services on Friday approved merger of Max Life Insurance Company Limited into HDFC Standard Life Insurance Company. The merger between the two insurance companies would create the country’s largest private sector life insurance companies.
“Max Financial Services Ltd has informed BSE that the Board of Directors of the Company at its meeting held on June 17, 2016, approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance Company Limited and Max Financial Services Limited into HDFC Standard Life Insurance Company Limited by way of a scheme of arrangement. The agreement provides for a mutually agreed exclusivity period for due diligence and discussions between the parties in relation to the proposed transaction,” said Max Financial Services Ltd in a notice to stock exchanges.
HDFC Life currently offers a range of individual and group insurance solutions that meet various customer needs such as Protection, Pension, Savings & Investment and Health, along with Children’s & Women’s Plan. The total premiums for the year ending March 31, 2016 were Rs. 16,313 crores and total AUM as of March 31, 2016 was Rs. 74,247 crores. While total premiums of Max Life for the year ending March 31, 2016 were Rs. 9,216 crores and total AUM as of March 31, 2016 was Rs. 35,824 crores.
HDFC Life is a partnership between HDFC Ltd., and Standard Life. Currently HDFC Ltd. holds 61.63% and Standard Life (Mauritius Holdings) 2006 Limited holds 35.00% of equity in HDFC Life, while the rest is held by others. On the other hand, Max Life Insurance, is a joint venture between Max Financial Services Ltd. and Mitsui Sumitomo Insurance Co. Ltd.
In the month of April, HDFC Ltd has informed stock exchanges that the Board of Directors of HDFC Standard Life Insurance Company Limited (HDFC Life), had approved taking steps to initiate the process for an initial public offer (IPO) by way of offer for sale by the Corporation, up to 10 % of the paid – up and issued equity share capital of HDFC Life.