Moving a step closer to form the country's biggest private sector life insurer, the board of HDFC on Monday approved the merger of Max Life and Max Financial Services with its insurance arm HDFC Standard Life Insurance Company.
The total premium of the merged entity is expected to be nearly Rs 26,000 crore and assets under management will top Rs 1 lakh crore. In the private life insurance space, only ICICI Prudential Life Insurance had reported AUM of Rs 1 lakh crore.
"We wish to inform you that a committee of the board of directors of the corporation has at its meeting held today approved the entering into definitive agreements for amalgamation of business...through a composite scheme of arrangement," Housing Development Finance Corporation (HDFC) said in a filing to the BSE. "As a part of the proposed transaction, the life insurance business of Max Financial, currently held through Max Life, would be finally amalgamated with HDFC Life and all other business of Max Financial would be finally amalgamated into Max India Limited," it added.
Earlier, HDFC and Max groups had entered into an "agreement to evaluate a potential combination through a merger of Max Life and Max Financial into HDFC Life through a scheme of arrangement".
As per reports, insurance regulator IRDAI had expressed concerns over transfer of liabilities related to businesses other than life insurance to the merged entity, if Max Financial and Max Life were merged into HDFC Life in totality.