Indian banking company Housing Development Finance Corporation (HDFC) is set to buy out the majority stake in Apollo Munich Health Insurance Company. According to a report published in Reuters on Wednesday, 19th June, HDFC will buy a 51.2 per cent stake in the insurance company for around $193.40 million.
Of the 51.2 per cent, 50.8 per cent stake will be that of the Apollo Hospitals Group and the rest (0.4 per cent) will be that of the company's employees. The insurance company is a joint venture between Apollo Hospitals and Germany's Munich Re.
The German company will be paying around $4.2 million to Apollo Hospitals Enterprise Ltd. and Apollo Energy Ltd. as the fee to terminate the joint venture. Following HDFC's purchase of the stake, the insurance company will be merged with HDFC's existing insurance wing, HDFC Ergo.
With respect to the buy-out, Apollo Hospitals' chairwoman Shobhana Kamineni told Reuters, "The funds from the divestment will enable us to focus on investing and growing our core healthcare business." HDFC is headquartered in Mumbai and was established in 1994.
Apollo Hospitals is based out of the southern city of Chennai and was set up in 1983. The Apollo Group and Munich Re entered into the joint venture around 12 years ago, in 2007 to set up the Apollo Munich Health Insurance Company.