HDFC Life Insurance Company shares declined 4 percent after the company announced the acquisition of a 100 percent stake in Exide Life Insurance for a total consideration of Rs 6,687 crore.

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Meanwhile, the shares of Exide Industries jumped over 13 percent in the early trade on Friday.

"HDFC Life will acquire 100 percent stake in Exide Life Insurance from Exide Industries via issuance of 8,70,22,222 shares at an issue price of Rs 685 per share and a cash payout of Rs 726 crore aggregating to Rs 6,687 crore," the company said in a regulatory filing.

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HDFC Life to acquire 100% stake in Exide Life Insurance for Rs 6,687 crore

The process for merger of Exide Life into HDFC Life will be initiated on completion of the acquisition. The entire process, including the acquisition and subsequent merger, is subject to obtaining the relevant regulatory and other approvals, it added.

"The proposed transaction will accelerate the growth of the Agency business of HDFC Life. Exide Life complements HDFC Life’s geographical presence and has a strong foothold in South India, especially in Tier 2 and 3 towns, thus providing access to a wider market," the company added.

The approval of shareholders for the proposed issue is sought to be obtained at an extraordinary general meeting on September 29, 2021.

HDFC Life management expects Exide Life to add 40 percent of topline agency business and 35 percent of agency pays.

At 10:30 am, the shares of HDFC Life were trading 2.75 percent lower at Rs 737.95 apiece, while Exide Industries was trading 7.46 percent higher at Rs 191.55 apiece on the BSE.

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