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HDFC Standard Life Insurance on Sunday said the due diligence process is almost completed for proposed creation of largest private sector life insurer.It also said that as part of proposed arrangement, efforts will be made to avoid any job loss in both Max Life Insurance and Max Financial Services.
Last month, the Board of HDFC Standard Life Insurance, Max Life Insurance and Max Financial Services approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance and Max Financial Services into HDFC Life by way of a scheme of arrangement.
"The parties are currently evaluating the proposed arrangement, which is subject to due diligence, valuation etc. Subject to the proposed arrangement being approved, our endeavour would be to retain employees from both the companies as the quality of talent on both sides is quite high" HDFC Standard Life Managing Director Amitabh Chaudhry told PTI.
"In cases where there could be duplication of responsibilities, we would intend providing the right opportunities for selection across internal roles and functions. We believe there would be several such opportunities for employees given the needs of a large organisation in a growing industry" he said.
As per the proposed deal, there would be two schemes of amalgamation. First, Max Life will merge into Max Financial and then the merged entity would amalgamate into HDFC Life. The company that would exist would be HDFC Life, which will automatically get listed on stock exchanges as it has merged a listed entity with itself.
"The objective of the proposed arrangement is to create a platform for growth and we believe it would create valuable proposition for all the stakeholders- policyholders, promoters and employees," he said.He further said that the due diligence process is almost completed."
Post that is completed, the next step is that the respective boards of the companies involved in merger process have to consider and approve the scheme of arrangement.
Thereafter, necessary regulatory and court approvals would be sought for the scheme of arrangement," he said.It will be a pure share swap deal and no cash would change hands. Upon the proposed arrangement being approved, it is envisaged that the combined life insurance businesses will be undertaken by HDFC Standard Life Insurance Company, he said, adding, in a country as vast as India, there is a possibility to consider two or more operational hubs.
HDFC Life's operations in Mumbai and that of Max Life in Gurgaon would prove to be complementary, he added.The merger will create the largest private insurance company with assets under management of over Rs 1 lakh crore and premia of around Rs 26,000 Crore.
