Chennai: HDFC Life Insurance Company Ltd (HDFC Life) said today that it has acquired Exide Life Insurance Company Ltd (Exide Life) for Rs 6,687 crore from Exide Industries Ltd.

Following the completion of the transaction, the process for merging Exide Life with HDFC Life will begin. The whole transaction, including the purchase and eventual merger, is subject to regulatory and other clearances.

The deal was authorised by the boards of three firms this morning.
HDFC Life would cover the whole cost by issuing 8,70,22,222 preferred shares to Exide Industries at a price of Rs 685 per share and a cash payment of Rs 726 crore, totaling Rs 6,687 crore. Exide Industries has invested Rs 1,679.59 crore in Exide Life, according to the company.

Exide Life's embedded value as of June 30, 2021, is Rs 2,711 crore, according to Willis Towers Watson Actuarial Advisory LLP. HDFC Life has an inherent value of Rs 27,331 crore. The purchase is scheduled to be completed by June 30, 2022.

Following the merger of Exide Life and HDFC Life, the latter's shareholding structure will be HDFC Ltd 47.9%, Exide Industries 4.1 percent, and Others 48 percent.

In terms of the reason for the purchase, HDFC Life claims that it would help the company's agency business develop faster.

Exide Life, with a turnover of Rs 4,937.46 crore and a net worth of Rs 1,481.42 crore, complements HDFC Life's geographical footprint by having a strong footing in South India, particularly in tier-2 and tier-3 towns, allowing access to a larger market.

Furthermore, Exide Life's predominately conventional and protection-focused business will add about 10% to HDFC Life's current embedded value.