Munich Re’s insurance unit ERGO has agreed to hike its stake by 22.9 per cent in HDFC ERGO, its joint venture with Housing Development Finance Corp for Rs 1,122 crore.
Under the pact, ERGO will acquire 12.3 crore shares of HDFC ERGO at Rs 90.97 per share. As a result, ERGO’s share in HDFC ERGO will rise from 25.84 per cent to 48.742 per cent, while HDFC’s will come down from 73.63 per cent to 50.73 per cent. The deal values HDFC ERGO at Rs 4,900 crore.
Under the shareholders’ agreement between HDFC and ERGO, the German group had the right to raise its share from 26 per cent in HDFC ERGO as and when laws permitted it.