April 25, 2024 10:00 (IST)
Apollo Hospitals Group agrees to sell 23.3% stake in Apollo Munich Health Insurance
Hyderabad, Jan 25 (IBNS): The Board of Directors of Apollo Energy Company Ltd., an Apollo Hospitals Group Company, at a meeting held on Monday, approved the divestment of 23.3% shareholding in 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.
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. Post consummation of the transaction, Apollo Hospitals Group’s shareholding in Apollo Munich shall stand reduced from 74.4% to 51.1%.
Correspondingly, Munich Re’s shareholding in Apollo Munich shall move to 48.7% and 0.2% will be held by employees. Apollo Hospitals shall continue to hold its stake in Apollo Munich.
Dr. Prathap C Reddy, Chairman, Apollo Munich Health Insurance Company Ltd. and Chairman, Apollo Hospitals Enterprise Ltd., welcomed the development and 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’.
Shobana Kamineni, Whole Time Director, Apollo Munich Health Insurance Company Ltd. and Executive Vice-Chairperson Apollo Hospitals Enterprise Ltd., said, “We are delighted that Munich Re has decided to increase their shareholding in our insurance venture. The transaction highlights the strong position of Apollo Munich as one of India’s leading and most trusted standalone Health Insurance Company. It also demonstrates the commitment of both the partners to further expand the operations of Apollo Munich.”
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 cap in the insurance sector from 26 % to 49 %.
With the increase in shareholding, Munich Re strengthens its presence in India which is one of the key markets for the company.
Doris Höpke, the 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.”
Axis Capital acted as the financial advisor to Apollo Hospitals group for the transaction.
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