HDFC buys out Chubb in insurance JV

HDFC bought out the 26% stake of Chinese insurance major in the JV whose book value expected to be around Rs100 crores would make the deal worth Rs 26 crore.The General Insurance Venture was set up in 2001.

The Insurance Regulatory and Development Authority(IRDA) has been approached by HDFC to clear the Buy-Out.Ergo,the German reinsurance company is speculated to be the lead runner in the race to pick up the Chubb stake,till then,as the HDFC authorities say the JV will be fully owned by them.

Indian insurance regulations limits foreign institutions to own a maximum of 26% stake in insurance ventures.The limit might be raised to 49% but not without political opposition.

Source: Mint

HDFC makes a formal offer to buy out Chubb in non-life insurance JV

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.