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German company ERGO will be HDFC’s partner in general insurance

German company ERGO will be HDFC’s partner in general insurance
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First Published: Tue, Oct 30 2007. 05 06 PM IST
Updated: Tue, Oct 30 2007. 05 06 PM IST
Reuters
Mumbai: Housing Development Finance Corp Ltd has agreed to sell 26% stake in its general insurance unit to Germany’s ERGO International AG for an undisclosed sum, the company said on 30 October 2007. ERGO’s parent company is Munich Re, the world’s second-biggest reinsurer.
HDFC will sell 32.5 million shares in HDFC General Insurance Ltd to ERGO and keep the remainder, the two firms said in a joint statement.
“We believe that HDFC and ERGO are a perfect fit and both will benefit from the ongoing growth of the Indian insurance market,” Nikolaus von Bomhard, chief executive at Munich Re Group, said in the statement.
The two partners had agreed to keep the transaction value confidential, it said.
The deal is subject to regulatory approval and is expected to be completed by the end of this year, it added.
HDFC had bought its partner Chubb Corp’s 26% stake in the general insurance venture earlier this year after an uneasy relationship stalled growth.
Shares in HDFC today closed 1.28% down at Rs2,777.10 on the Bombay Stock Exchange that slipped nearly 1%.
Foreign companies are allowed to own up to 26% of an Indian insurance company.
HDFC also runs a life insurance firm in a joint venture with UK’s Standard Life.
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First Published: Tue, Oct 30 2007. 05 06 PM IST