HDFC has formally offered to buy out its foreign partner Chubb from their non-life insurance JV HDFC Chubb General Insurance. HDFC holds 74% equity stake in the company, while Chubb has the remaining 26%. As of yet, no sale agreement has been reached due to price considerations. The transaction would also require regulatory clearance.
HDFC may rope in another partner by selling the stake it buys from Chubb at a premium. Though it has not found yet one, it is learnt that Ergo, the direct insurance arm of reinsurance giant Munich Re, has shown interest in tying up with HDFC.
Chubb and HDFC have been disagreeing on business strategy: HDFC wanted to adopt a more aggressive stance, keeping with its market leadership position in other group business, whereas, Chubb takes a very long-term view worldwide, waiting as long as six years in some markets before moving into a growth mode.
Read more in The Economic Times article.
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