The Merger of HDFC and Max Life Becomes India’s Largest Insurance Company in the Private Sector

India’s largest private insurance company - pixorangeDeepak Parekh and Analjit Singh of HDFC Life and Max Life made a press conference explaining details of deals on creating India’s largest life insurer in the private sector. Mr.Parekh is of the opinion that macro economic conditions in India are just good for the merger and both HDFC and Max have powerful synergies.  Mr.Analjit did not find any useful consolidation in life insurance industry for years together. HDFC Life would be a listed entity after the completion of the merger. Max Life is to be merged in Max Fin Svcs and then to HDFC LIFE with renewable premiums slated to grow around 10% every year.

The new business premium is scheduled to grow by 15% in 5 years, which is subject to shareholder’s approval and regulatory and there would not be any open offer in the merger of Max Life. The agreement has the provision of 6 months exclusive period for due diligence and discussions regarding the proposed transaction, which has been agree mutually upon. The combined form would become the largest insurance company in the private sector both in terms of assets management and new premium collections. Assets of the combined entity would be nearly Rs.1.10 lakh crore and new premiums would amount to be nearly Rs.9400 crore.