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As <a href="http://www.businessinsider.in/Max-Life-Max-Financial-Services-HDFC-Standard-Life/articleshow/52793638.cms">reported</a>, Max Life Insurance and Max Financial Services will now be a part of <keyword id="472962" type="ORGANIZATION" weightage="100" keywordseo="HDFC-Life">HDFC Life</keyword>, thanks to a two-stage merger. As per sources, this merger will facilitate automatic listing of HDFC Life on the <keyword id="458987" type="UNKNOWN" weightage="100" keywordseo="Indian-bourses">Indian bourses</keyword> with a market capitalisation of about Rs 45,000 crore to Rs 50,000 crore, thus making it the largest pureplay listed life insurance player of the country. 
 In the final entity after the merger, HDFC group, including HDFC, Standard Life and <keyword id="6419840" type="PERSON" weightage="100" keywordseo="Azim-Premji">Azim Premji</keyword>, will have about 60-65% stake, while the Max group, under <keyword id="10338" type="PERSON" weightage="100" keywordseo="Analjit-Singh">Analjit Singh</keyword>’s leadership, will have 35-40% ownership, to be distributed among Singh family, Japanese financial behemoth Mitsui Sumitomo Insurance (MSI), a member of MS&amp;AD Insurance Group, Goldman Sachs, KKR and general public. 
 
After the report of this merger, shares in Max Financial Service touched the upper circuit of Rs 514 and closed at Rs 473. 
 
As of now, Max Financial Services, a pureplay holding company for Max Life Insurance, finds place on on the Indian bourses, for which Analjit Singh had completed a three-way split of Max India last financial year. After demerger, Singh had sold 9.5% in Max Financial Service to KKR, the US-based private equity firm, in a deal of about Rs 1,000 crore worth. 
 The deal announced today would have Max Life Insurance (MLI) merging with its parent company Max Financial Services (<keyword id="346739" type="ORGANIZATION" weightage="100" keywordseo="MFSL">MFSL</keyword>), which currently owns 68.01% stake, while the Japanese partner MSI owns 25% and Axix Bank holds another 5.99%; the remaining 1% stake while key employees of MSI. 
 
After this, the final merged entity will be combined with HDFC Life Insurance. "Given the current discussion, in the merged entity HDFC Life - MAX Life, the HDFC group will have about 65% stake and Max Group will have about 35% stake," a person involved in the deal told <a href="http://economictimes.indiatimes.com/markets/stocks/news/merger-with-max-life-to-facilitate-automatic-listing-of-hdfc-life/articleshow/52795023.cms">ET</a>. 
 
After this merger, HDFC Life Insurance will automatically get listed at about Rs 50,000 crore, helping HDFC raise funds by diluting its stake in the insurance firm though stock exchanges. This would also allow some of the marquee investors, who had invested in MFSL a few years back, to exit as and when they want.

Merger with Max Life will automatically list HDFC Life on Indian bourses

As <keyword id="472962" type="ORGANIZATION" weightage="20" keywordseo="HDFC-Life">HDFC Life</keyword> and <keyword id="1118012" type="UNKNOWN" weightage="20" keywordseo="max-life">Max Life</keyword> are all set to create the country's biggest private life insurer, <keyword id="6448020" type="PERSON" weightage="20" keywordseo="Deepak-Parekh">Deepak Parekh</keyword> and <keyword id="10338" type="PERSON" weightage="20" keywordseo="Analjit-Singh">Analjit Singh</keyword> came together in a press conference to disclose some of the details of the deal which is now sealed. Parekh said he believes macro economic conditions in India are favourable for such a merger and, HDFC and Max have strong synergies. Meanwhile Analjit said he has not seen effective consolidation in <keyword id="6406875" type="COMPANY" weightage="20" keywordseo="life-insurance">life insurance</keyword> industry in years. 

	Key announcements made: 
 

	- HDFC LIFE to be the listed entity on completion of merger process

	- Max Life to merge into Max Fin Svcs, then into HDFC LIFE

	-Renewable premiums to grow around 10% per year going ahead. New business premium to grow by 15% in five yrs

	-Deal is subject to regulatory, shareholder approvals, and there is no need for open offer in Max Life merger

	-The agreement provides for a mutually agreed 6-month exclusivity period for due diligence and discussions between the parties in relation to a proposed transaction.
 

	The combined entity would be the largest private sector insurer, both in terms of assets under management and new business premiums. Assets under management of the combined entity would touch Rs 1.10 lakh crore and new premiums would almost touch Rs 9400 crore.
 HDFC Life is a joint venture between HDFC and <keyword id="1110792" type="ORGANIZATION" weightage="20" keywordseo="Standard-Life-plc">Standard Life Plc</keyword>, a provider of financial services in the UK. While HDFC holds 61.65 per cent in it, the foreign partner holds 35 per cent. Max Life Insurance, is a joint venture between Max Financial Services Ltd. and Mitsui Sumitomo InsuranceCo. Ltd. The foreign partner holds 25 per cent in the insurer. Max Financial Services is already listed on the stock exchanges and is the holding company of Max Life Insurance. 

	For HDFC, this will be the second such merger announced in this month. Earlier in June, HDFC Ergo General Insurance, the general insurance arm of mortgage lender HDFC, said that it will acquire L&amp;T General Insurance for Rs 551 crore, which if completed would be the first ever merger in the insurance industry.

HDFC Standard + Max Life = Rs 50,000 crore, India’s largest private insurance company

<ul><li><keyword id="6411578" type="PERSON" weightage="20" keywordseo="ajay-piramal">Ajay Piramal</keyword> received ₹8,900 crore, a whopping 52% return or $1.4 billion as per the exit agreement from vodafone-Idea.</li><li>Singh however exited <keyword id="6354923" type="UNKNOWN" weightage="20" keywordseo="vodafone-india">Vodafone India</keyword> in 2014 by selling his entire stake to its parent company Vodafone for ₹1, 241 crore.</li><li>Essar agreed to sell their stake at $5 billion which was a part of the deal</li><li>Here is a look at these three wise men</li></ul>The owners and shareholders of Vodafone Idea alike are nervous about its survival. All thanks to Supreme <a href="https://thewire.in/business/apex-court-verdict-on-agr-how-much-will-indias-telecom-industry-have-to-cough-up">Court’s move to support Indian telecom department</a> over a dispute on revenue calculations. That means <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms">Vodafone is saddled with a bill of ₹44,150 crore</a>. But not all those who invested in Vodafone have lost. In fact, <a href="https://www.business-standard.com/article/companies/wherever-vodafone-investors-go-hefty-returns-follow-114041500133_1.html">three investors made the right bet at the right time</a> and walked away with handsome profits. Here is a look at these three wise men Ajay Piramal makes 52% returns on his investment 
 
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 Right after the first telecom war cooled off, Vodafone India (before merger with Idea) was back in the green due to reduced competitive intensity. That is when Vodafone was planning to go ahead with a public offer. One of the pre-IPO investors was Ajay Piramal who via Piramal Enterprises purchased 11% stake in 2011-12. He paid ₹5,864 crore but when it became obvious that the IPO plans were not going through, he also sold them in 2014. And, <a href="https://www.forbes.com/sites/naazneenkarmali/2013/12/06/indian-billionaire-ajay-piramal-to-get-500-million-windfall-from-vodafone-stake-sale/#645833232d13">he received ₹8,900 crore</a>, a whopping 52% return or $1.4 billion, as per the exit agreement. Putting it simply, he received a listing premium for an IPO that never happened. Now of course, the Piramals are associated with the reigning telecom giant Jio, by marriage. Ajay Piramal’s son Anand Piramal is married to Isha Ambani, the daughter of Mukesh Ambani, the owner of Reliance Industries. Analjit Singh exits his legacy investments for ₹1, 241 crore 
 
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 <a href="https://www.thehindubusinessline.com/info-tech/analjit-singh-appointed-vodafone-india-chairman/article23065539.ece">Analjit Singh</a>, the founder and chairman of Max India, and his wife held 24.65% in Vodafone through Scorpio Beverages. He <a href="https://www.business-standard.com/article/technology/essar-exits-vodafone-for-5-bn-111040100124_1.html">had been with the Hutch group</a> before it was purchased by Vodafone and also increased in stake later. Singh however exited Vodafone India in 2014 by selling his entire stake to its parent company Vodafone for ₹1, 241 crore. He got <a href="https://economictimes.indiatimes.com/industry/telecom/analjit-singh-to-get-1/7th-of-what-piramal-will-get-for-exiting-vodafone/articleshow/26973026.cms?from=mdr">1/7th of what Piramal received</a>, as the British parent was increasing its stake in the company. He currently heads Max Group that comprises of three holding firms, namely Max Financial Services, Max India and Max Ventures and Industries. The Ruias of Essar call in the cash with their put option 
 
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 When Ruias of Essar sold 67% of controlling stake to Vodafone in 2007, they never exited completely. They had held 33% minority stake in the company. The former deal which landed Vodafone in an <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms">unexpected tax case</a>, also provided Ruias with a put option to exit their investment. During the start of this decade, Vodafone was planning an IPO and buying out all the minority shareholders. After multiple rounds of <a href="https://www.business-standard.com/article/technology/essar-exits-vodafone-for-5-bn-111040100124_1.html">negotiating and dilly dallying</a>, Essar agreed to sell their stake at $5 billion which was a part of the deal. However, since the 2007 deal was brokered, the value of India business had gone down due to severe competition as Tata DoCoMo made an entry in 2008. See also: <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms">Vodafone-Idea is now a ₹3 stock after a shocking quarterly loss</a> <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms"> </a><a href="https://www.businessinsider.in/business/corporates/news/vodafone-writes-off-book-value-of-indian-operation-ceo-flags-liquidation-risk/articleshow/72031766.cms">Vodafone CEO Nick Read hints at a possible collapse without government support</a>

Three wise men who exited Vodafone India just in time to make millions

New Delhi, Mar 4 () Tokyo-based Mitsui Sumitomo Insurance will acquire 21.87 per cent stake in Max Financial Services by swapping majority of its shareholding in Max Life Insurance (MLIC), a statement said on Wednesday. The board of Max Financial Services Ltd (MFS) has approved a transaction which will allow Mitsui Sumitomo Insurance (MSI) to swap 20.57 per cent of its shareholding in Max Life insurance with 21.87 per cent stake in MFS, the statement added. MFS and MSI (a part of MS&amp;AD Insurance Group Holding of Japan) are 73:25 joint venture partners in private life insurer Max Life Insurance Company of the Analjit Singh-promoted Max Group. This will enable the company to simplify the shareholding structure in its subsidiary and have more flexibility to attract strategic investments in Max Life in the future and yet maintain its significant majority ownership, MFS said in the statement. As per the transaction structure, MSI will get 75,458,088 shares of MFS at Rs 565.11 per share aggregating to 21.87 per cent of the paid-up equity share capital. In consideration, MFS will receive 394,775,831 shares from MSI at a price of Rs 108.02 per share, translating into 20.57 per cent stake of MLIC. "Pursuant to this, the equity stake held by MFS in Max Life will increase to 93.10 per cent. The transaction will lead to a change in MFS' shareholding pattern," it added. The transaction will also provide MFS the option to purchase from MSI its balance shareholding in Max Life for cash at a price of Rs 85 per share. The transaction is subject to requisite approvals and is expected to be concluded by June 2020. "We value MSI as our long term partners in the life insurance business and we are confident that they will continue to provide their expertise and counsel to MFS and Max Life through the board governance mechanism," said Mohit Talwar, MD, Max Financial Services and Vice Chairman, Max Group. This transaction makes the holding structure simpler and helps consolidate shareholding in Max Life which is expected to benefit all shareholders by attracting more investor interest, Talwar said. KPM ABM

Japan's Mitsui Sumitomo to acquire 21.87 pc stake in Max Financial in share swap deal

New Delhi, Apr 28 () Axis Bank has decided to raise its stake in Max Group promoted Max Life Insurance to 30 per cent, a development which values the insurer at over Rs 5,000 crore.With the deal going through, sources said, the bank is expected to pay Rs 1,600 crore to Max Financial Services (MFS), the holding company of Max Life. Axis Bank holds about 1 per cent stake in Max Life and is the biggest banking channel partner for distribution of its products. Products sold through the bank reportedly contribute for 54 per cent of Max Life's revenues.The boards of Axis Bank, MFS and Max Life approved the transaction late on April 27, a joint statement said on Tuesday."This is an outcome of the inter-se discussions after the three companies had signed a confidentiality and exclusivity arrangement on February 20, 2020 to explore the possibility of a long-term strategic partnership between Axis Bank and Max Life," it said.Interestingly, the deal comes at a time when the economy is hit by COVID-19 crisis impacting all sectors of the economy including the financial sector.It is to be seen how the sectoral regulators including the Reserve Bank of India (RBI) and Insurance Regulatory and Development Authority of India (IRDAI) deal with the proposed transaction in these difficult times. MFS holds 72.5 per cent stake in Max Life and Japan-based Mitsui Sumitomo Insurance (MSI) owns 25.5 per cent stake. The joint venture arrangement will significantly improve Max Life's position vis-a-vis its competitors, including the other large banks owned life insurers, it said."The development will result in a mutually beneficial and enduring relationship between Axis Bank and Max Life and bring the stability of a long term partnership to India's fourth largest private life insurance franchise," it said.The proposed transaction with Axis Bank follows the ongoing swapping by MSI of 20.6 per cent stake that it holds in Max Life with a 21.9 per cent stake in MFS, it added."MFS also plans to purchase MSI's balance stake in Max Life. Post completion of the series of transactions, Max Life will become a 70:30 joint venture between MFS and Axis Bank" the statement said.The proposed transactions are subject to approval of requisite corporate and regulatory authorities including IRDAI, RBI and the Competition Commission of India, it added.With regard to branding, it said, Max Life's tag line will include Axis Bank's name, which will further enhance customer trust in the brand and highlight the strength of the partnership.The two companies have had a successful business relationship for over a decade, providing long term saving and protection products to over 19 lakh customers, it said.The total premium generated through this relationship has aggregated to over Rs 38,000 crore, it said, adding, both companies have invested extensively in product and need-based sales training, thereby leading to consistent increase in productivity.It is to be noted that Max Life had made an attempt to merge with HDFC Life in 2017 which failed as they did not receive regulatory approval due to reported complexity of the deal.Interestingly, the deal was then brokered by the then HDFC Life CEO Amitabh Chaudhry who is now the CEO of Axis Bank. Following failure of the deal, Max Group made several attempts to sell part of its stake. However, it did not meet success.Announcing the transaction, Axis Bank CEO Amitabh Chaudhry said, "We continue to believe in the long-term prospects of India's under-penetrated life insurance space, current environment notwithstanding. We see this joint venture creating immense value for our stakeholders given our long-standing, high performing partnership with Max Life."This transaction will help deepen working relationship leading to better integrated teams and infrastructure and a superior alignment in approach, he added.Max Group founder and Chairman Analjit Singh said, "I believe that in Axis, we have found an exceptional partner and we have conviction that this will make Max Life fundamentally stronger, better performing and will bring stability to the franchise. We will run the organization as if it's an equal partnership, a philosophy which has held us in good stead earlier as well."Virtually all major banks in the country have a presence in the insurance segment through joint ventures with foreign players, as banks' ability to distribute products gives them an edge in the sector that delivers one of the best profitability ratios over a long term. DP ANUANU

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