HDFC & Max Financial In Spotlight After Merger Of Life Insurance Business


Shares of HDFC and Max Financial Services were in spotlight today. HDFC’s live insurance arm HDFC Standard Life Insurance reached agreement on Monday to take over smaller rival Max Life Insurance in an all-stock deal to create the nation’s top private life insurer valued at nearly $10 billion.HDFC Life shareholders would own 69 per cent of the new company and Max Life shareholders 31 per cent.As part of the deal, Max Life is to be merged into parent Max Financial Services, which in turn will combine its life insurance business with HDFC Life, making it a publicly traded company.Based on the current share price of Max Financial, the combined entity will be valued at about Rs 65,000 crore, said HDFC Life Chief Executive Amitabh Chaudhry.In the first stage of the transaction, Max Life shareholders will get one share of Max Financial Services for every 4.98 shares of Max Life. In the deal to combine their life insurance businesses, Max Financial Services’ shareholders will get 2.33 shares of HDFC Life for every Max Financial share held.As of 9:49 a.m., shares of Max Financial Services traded 0.2 per cent higher at Rs 546.80 while HDFC was down 0.64 per cent at Rs 1,358.65.

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