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Healthcare major Apollo Hospitals Group has divested 23.3 per cent stake in the insurance arm Apollo Munich Health Insurance Company Ltd to its joint venture partner Munich Re of Germany for Rs 163.5 cr. The proposed transaction values Apollo Munich at Rs 703 cr.
At 163 cr, the transaction values Apollo Munich Health Insurance at 703 crore
Hyderabad: Healthcare major Apollo Hospitals Group has divested 23.3 per cent stake in the insurance arm Apollo Munich Health Insurance Company Ltd to its joint venture partner Munich Re of Germany for Rs 163.5 cr. The proposed transaction values Apollo Munich at Rs 703 cr.
Post the transaction, Apollo Hospitals Group’s shareholding in the health insurance joint venture will come down from 74.4 per cent to 51.1 per cent. Correspondingly, Munich Re’s shareholding in it will go up to 48.7 per cent. The remaining 0.2 per cent stake of Apollo Munich Health is with the employees.
“The Board of Directors of Apollo Energy Company Ltd, an Apollo Hospitals Group company, at a meeting held today, approved the divestment of 23.3 per cent shareholding in Apollo Munich Health Insurance Company Ltd to its joint venture partner, Munich Re of Germany for Rs 163.5 cr,” Apollo Hospitals said in a release.
Completion of the proposed transaction is subject to applicable regulatory approvals and execution of customary agreements, which is expected to be completed at the end of the first quarter of 2016. “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,’ said Dr Prathap C Reddy, Chairman, Apollo Hospitals.
The opportunity for Munich Re to increase its shareholdings was provided through the decision of the Indian Government in March 2015 to increase the foreign direct investment (FDI) 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, a key market for the German company.
“Since its start in 2007, Apollo Munich Health Insurance has shown exceptional, often above-market growth rates. With the increased stake-holding, we are strengthening our position for sustainable and profitable growth in this region,” said Doris Hopke, the member of the Munich Re Board of Management responsible for Munich Health. Axis Capital acted as the financial advisor to Apollo Hospitals group for the transaction.
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