HDFC Life & Max Group entities agree terms

RNS Number : 5676G

Standard Life plc

08 August 2016

 

8 August 2016

HDFC Life and Max Group entities agree terms to combine life insurance businesses

Standard Life plc ("Standard Life") notes the announcement by its Indian associate, HDFC Standard Life Insurance Company Limited ("HDFC Life") today that it has agreed terms with Max Life Insurance Company Limited ("Max Life"), Max Financial Services Limited ("Max FS") and Max India Limited ("Max India") for the combination of the life insurance businesses of HDFC Life and Max Life. The transaction will be effected through a composite scheme of arrangement, the final form of which remains subject to approval by parties to the transaction and, once finalised,  is subject to approval by the shareholders of HDFC Life, Max Life, Max FS and Max India as well as regulatory and high court approvals. 

Following completion of the transaction, the shares of HDFC Life will list on The Bombay Stock Exchange and the National Stock Exchange of India, subject to the approval of these stock exchanges and the Securities and Exchange Board of India.

Based on current shareholdings, following completion of the transaction, the shareholders of HDFC Life would hold 69% of the enlarged HDFC Life. Standard Life, through its wholly owned subsidiary, would remain the second largest shareholder in HDFC Life with a shareholding of 24.1%. 

Keith Skeoch, CEO of Standard Life plc, said: "I am delighted with today's announcement of the proposed transaction. Max Life's bancassurance relationships will complement HDFC Life's already strong distribution. If approved, we expect it to cement HDFC Life's position as the leading private sector Indian life insurance business. As a result of this transaction, we will have strategic stakes in leading Indian life insurance and asset management companies."

For further information please contact:

Institutional Equity Investors Jakub Rosochowski Neil Longair	[phone]* [phone] [phone]* [phone]
Media Barry Cameron Steve Hartley	[phone]* [phone] [phone]* [phone]
Group Secretariat Paul McKenna	[phone]*

*  Calls may be monitored and/or recorded to protect both you and us and help with our training.  Call charges will vary.

Notes:

The transaction will be effected by means of a composite scheme of arrangement. Approximate post-completion shareholdings in HDFC Life, based on current share holdings in the relevant companies, would be:

Shareholder	Approximate post-transaction shareholding
Standard Life	24.1%
Housing Development Finance Corporation Limited	42.5%
Other shareholders in HDFC Life	2.4%
Total shareholders in HDFC Life	69.0%
Shareholders in Max FS	21.7%
Shareholders in Max Life excluding Max FS	9.3%
Total existing shareholders in Max Life and Max FS	31.0%
Total	100.0%

Treatment of Standard Life's shareholding in HDFC Life

Completion of the proposed transaction would result in Standard Life's current shareholding of 35% in HDFC Life becoming 24.1% of the enlarged HDFC Life entity at completion. As a result, if the transaction is completed, Standard Life expects to recognise a dilution gain in its consolidated income statement, with a corresponding increase in the carrying value of its investment in HDFC Life. The amount of the dilution gain will be dependent on a number of factors including the share price of Max FS at completion, foreign exchange rates and the profit or loss reported by HDFC Life until completion of the transaction. Standard Life would remain the second largest shareholder in the enlarged HDFC Life. The dilution gain is not expected to give rise to a tax charge. Profits or losses arising on the disposal of associates are not included in operating profit. 

About Standard Life

·      Standard Life is an investment company with over 190 years' experience of helping people invest and manage their money.

·      Standard Life employs around 6,500 people internationally - through businesses in the UK, Europe, North America, Asia and Australia.

·      Around 4.5 million customers and clients across 46 countries trust Standard Life with their financial future. Standard Life is responsible for the administration of £314 billion of their assets, with Standard Life Investments, actively managing £259 billion of these assets globally, as at 31 March 2016. Standard Life also supports over 25 million customers through Indian and Chinese associate and joint venture businesses^#.

·      Standard Life plc is listed on the London Stock Exchange with around 1.2 million individual shareholders.

·      Standard Life is proud to be listed as a leader for corporate sustainability in its industry in the Dow Jones Sustainability Indices (DJSI World and DJSI Europe).

·      You can follow Standard Life on www.twitter.com/StandardLifeplc 

^# All figures as at 31 March 2016 

About HDFC Life

·      HDFC Life was established in 2000 and was the first private life insurance company to be granted a licence following the liberalisation of the Indian insurance market.

·      HDFC Life is one of the leading life insurance companies in India offering a range of individual and group insurance solutions that meet various customer needs such as Protection, Pension, Savings & Investment and Health, along with Children's & Women's Plan.

Forward-looking statements

This announcement may contain 'forward-looking statements' about certain of the Standard Life Group's current plans, goals and expectations relating to future financial conditions, performance, results, strategy and objectives. Statements containing the words: 'believes', 'intends', 'targets', 'estimates', 'expects', 'plans', 'seeks' and 'anticipates' and any other words of similar meaning are forward-looking. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which may be beyond the Group's control. As a result, the Group's actual financial condition, performance and results may differ materially from the plans, goals and expectations set out in the forward-looking statements, and persons reading this announcement should not place undue reliance on forward-looking statements. The Standard Life Group undertakes no obligation to update any of the forward-looking statements in this announcement or any other forward-looking statements it may make.

Inside Information

Prior to publication, this announcement contained information treated as inside information for the purposes of the Market Abuse Regulation which came into effect on 3 July 2016.

 

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