Millennium Post

Private HDFC ERGO buys smaller rival L&T General Insurance for Rs 551 crore

The fourth largest private sector general insurer HDFC ERGO on Friday said it will acquire its smaller rival L&T General Insurance in an all-cash deal for Rs 551 crore. “The board of HDFC ERGO General Insurance Company has approved purchase of 100 per cent stake in L&T General Insurance Company subject to regulatory approvals,” a company statement said here. Once the approvals are in place, the acquired entity will be merged with the aquirer, it said. The transaction has been valued at Rs 551 crore in the all-cash deal structured by Arpwood Capita, which advised HDFC ERGO. The acquisition would help the company improve its market position. 

The merger process would take about 11 months, it said. Once the deal goes through, this would be the first ever merger of two insurance companies. HDFC ERGO is a 51:49 joint venture between mortgages major HDFC and ERGO International of Germany, which is part of the Munich Re Group, and is the fourth largest private sector general insurer in the country.

It offers all lines of general insurance products, including motor, health, personal accident, home, fire, marine, aviation, liability and crop insurance. In fiscal 2016, it wrote gross premiums of Rs 3,467 crore and made a net profit of Rs 151 crore. It operates through 108 offices and employees a little over 2,000 staff. 
PTI

PTI

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