Hyderabad, January 28, 2016: The board of directors of Apollo Energy Company Ltd, an Apollo Hospitals Group company, has approved the divestment of 23.3 per cent stake in Apollo Munich Health Insurance to its joint venture partner, Munich Re of Germany for ₹163.5 crore.
The proposed transaction values Apollo Munich at ₹703 crore. Completion of the proposed transaction, subject to regulatory approvals and execution of customary agreements, is expected to be completed at the end of the first quarter of 2016.
Post consummation of the transaction, Apollo Hospitals Group’s shareholding in Apollo Munich shall come down from 74.4 per cent to 51.1 per cent. Correspondingly, Munich Re’s shareholding in Apollo Munich shall move to 48.7 per cent and 0.2 per cent will be held by employees. Apollo Hospitals shall continue to hold its stake in Apollo Munich.
Prathap C Reddy, Chairman, Apollo Munich Health Insurance Company Ltd and Chairman, Apollo Hospitals Enterprise Ltd, in a statement said:, “Insurance is a key element for making quality healthcare facilities accessible to the masses. The show of confidence from our JV partner will go a long way in helping the Group achieve its vision of ‘Healthcare for all’.”
Doris Höpke, member of the Munich Re Board of Management responsible for Munich Health, said: “India’s population structure, increased life expectancy and positive economic development will usher in a steep rise in medium-term healthcare spending. Since its start in 2007, Apollo Munich Health Insurance has shown exceptional, often above-market growth rates. With the increased stakeholding, we are strengthening our position for sustainable and profitable growth in this region. Apollo Munich Health Insurance is committed to make quality healthcare easy and accessible.”
Munich Re is able to increase its stake following the Centre’s decision in March 2015 to increase the foreign direct investment cap in the insurance sector from 26 per cent to 49 per cent.
With the increase in shareholding, Munich Re strengthens its presence in India, which is one of the key markets for the company.
Axis Capital acted as the financial advisor for the transaction.-V Rishi Kumar, BusinessLine
