NISHITH.TV
  • Mumbai
  • Silicon Valley
  • Bengaluru
  • Singapore
  • Mumbai BKC
  • New Delhi
  • Munich
  • New York

Locations

  • Mumbai
  • Silicon Valley
  • Bengaluru
  • Singapore
  • Mumbai BKC
  • New Delhi
  • Munich
  • New York
  • Content
  • Home
  • ABOUT US
  • NDA in the Media
  • Areas of Service
  • Research and Articles
  • Opportunities
  • Contact
  • NDACloud
  • Client Access
  • Member Access
  • Events and Calender
  • How we perform
  • Knowledge anywhere, anytime
  • See our recent deals
  • Up to date legal developments
  • Case studies in M&A

M&A Lab

HTMLPDF

October 6, 2017

HDFC Life - Max Life: A Lost Pursuit

Announcements made on June 17, 2016 by HDFC Standard Life Insurance Company Limited (“HDFC Life”), Max Life Insurance Company Limited (“Max Life”) and Max Financial Services Limited (“MFSL”) regarding a proposed merger of Max Life with HDFC Life (“Proposed Merger”), created a stir in the Indian insurance sector. The announcement of the Proposed Merger came after the disclosure made by HDFC Limited to the stock exchanges on April 21, 2016, regarding its intention to sell 10% stake in HDFC Life via an initial public offering process.

The primary objective of the Proposed Merger appeared to have been the proposed listing of HDFC Life through a reverse listing process. However, the Proposed Merger also offered various other baits to the parties involved in the Proposed Merger. While on one hand, the Proposed Merger would have facilitated an exit for the shareholders of Max Life, including the promoter group of Max Life, on the other hand, it would have resulted in a resultant entity commanding 12.4% of the total market share in the Indian life insurance sector (making it the largest private insurance provider in India). The Proposed Merger would have also increased HDFC Life’s solvency margin from 198% to 252% and the resultant entity would have benefitted from the positive synergies and economies of scale, through a wider outreach, broader range of products and access to common pool of resources.

Given the objectives of the parties to the Proposed Merger and regulatory framework for mergers and acquisitions in India, specifically in the Insurance sector, the Proposed Merger: (a) entailed a multi-layered complex merger process through a composite scheme of arrangement between HDFC Life, Max Life, MFSL and Max India Limited; and (b) required scrutiny and approval of Insurance Regulatory and Development Authority of India (“IRDA”) and the Competition Commission of India (“CCI”). The IRDA rejected the Proposed Merger in the form proposed on a literal interpretation of the provisions of the Insurance Act, 1938.

Having seen a couple of structures rejected by the IRDA and given HDFC Life’s intentions to list itself on the Indian bourses, the Proposed Merger was called off by the parties on July 31, 2017. While the announcements made by HDFC Life calling off the Proposed Merger puts an end to the speculation in the insurance sector regarding the Proposed Merger, we have made an attempt to analyse the legal, regulatory, commercial and tax aspects of the Proposed Merger in this M&A Lab.

For a detailed analysis of the commercial, legal, regulatory and tax considerations and to access the M&A Lab, please click here.

 

– Rishabh Sharma, Jenisha Kirti Parikh & Nishchal Joshipura

You can direct your queries or comments to the authors

 

INTERESTING READ

FLÄKT (INDIA) LIMITED, FLÄKTWOODS GROUP, HAS ACQUIRED THE AIR MANAGEMENT SYSTEMS08-01-2020
FLÄKT (INDIA) LIMITED, FLÄKTWOODS GROUP, HAS ACQUIRED THE AIR MANAGEMENT SYSTEMS08-01-2020

Mission and Vision


Distinctly Different

What's New


Dissecting The Insolvency Code - Empowering Investors by Extinguishing Antecedent Liabilities
Insolvency and Bankruptcy Hotline: September 26,2023
NDA Represents Veritone, Inc. In Its Acquisition of Broadbean from CareerBuilder, LLC
Deal Corner : September 26,2023

Events


Webinars

Impact of The New Indian Data Law on Multinational Companies Operating in India
August 22,2023 - August 22,2023

This event is over. For event material please click here


Seminar

GST solutions for Online Gaming Industry
September 13,2023 - September 13,2023

This event is over. For event material please click here


Round Table

Investing In Net Zero
July 22,2022 - July 22,2022

This event is over. For event material please click here

News Roundup


News Articles

Reciprocity requirement for enforcement: A roadblock in ease of doing business?
August 24,2023

Quotes

English, Welsh lawyers have no intention of taking court work away from Indian lawyers: UK Law Society President
September 23,2023

Newsletters


Insolvency and Bankruptcy Hotline

Dissecting The Insolvency Code - Empowering Investors by Extinguishing Antecedent Liabilities
September 26,2023

IP Hotline

Delhi High Court: Mere Use of Trademarks as Keyword not Infringement Per Se
September 25,2023

Technology Law Analysis

Implications of the New Data Protection Law on M&E industry
September 23,2023

  • Disclaimer
  • Content
  • Feedback
  • Walkthrough
  • Subscribe
Nishith Desai Associates@2016 All rights reserved.