IRDAI has informally indicated no objection with Apollo Munich Health Insurance and HDFC ERGO General Insurance’s merger, as per the information from source.
Promoters of Apollo Munich Health Insurance and HDFC ERGO General Insurance had informally sounded out the insurance regulator for its approval.
“The deal structure is being done in two steps to ensure adherence to foreign holding norms in insurance. HDFC will buy out Apollo’s stake in Apollo Munich and then merge it into HDFC ERGO. There should be no issue since a standalone health insurance and general insurance entity can exist under the same company,” the IRDAI source said.
The initiative of reaching out to the regulator was taken by Housing Development Finance Corp before announcing the deal, as it has faced rejection earlier, the source said.
HDFC approved acquiring 50.8% stake in Apollo Munich from the Apollo Hospitals Group, for 13.36 bln rupees, and 0.4% stake from a few employees of the health insurance company, for 108.4 mln rupees.
