Apollo Hospitals Group to sell stake in Apollo Munich Health Insurance

The proposed transaction values Apollo Munich at Rs 703 cr

The Board of Directors of Apollo Energy Company, an Apollo Hospitals Group Company, at a meeting approved the divestment of 23.3 per cent shareholding in Apollo Munich Health Insurance Company (Apollo Munich) to its joint venture partner, Munich Re of Germany for Rs 163.5 crore. The proposed transaction values Apollo Munich at Rs 703 crore.

Completion of the proposed transaction is subject to applicable regulatory approvals and execution of customary agreements, which is expected to be completed at the end of the first quarter of 2016. Post consummation of the transaction, Apollo Hospitals Group’s shareholding in Apollo Munich shall stand reduced from 74.4 to 51.1 per cent. Correspondingly, Munich Re’s shareholding in Apollo Munich shall move to 48.7 and 0.2 per cent will be held by employees. Apollo Hospitals shall continue to hold its stake in Apollo Munich.

Dr Prathap C Reddy, Chairman, Apollo Munich Health Insurance Company and Chairman, Apollo Hospitals Enterprise, welcomed the development and said, “Insurance is a key element for making quality healthcare facilities accessible to the masses. The show of confidence from our JV partner will go a long way in helping the Group achieve its vision of ‘Healthcare for all’.

Shobana Kamineni, Whole Time Director, Apollo Munich Health Insurance Company and Executive Vice-Chairperson Apollo Hospitals Enterprise, said “We are delighted that Munich Re has decided to increase their shareholding in our insurance venture. The transaction highlights the strong position of Apollo Munich as one of India’s leading and most trusted standalone Health Insurance Company. It also demonstrates the commitment of both the partners to further expand the operations of Apollo Munich.”

The opportunity for Munich Re to increase its shareholdings was provided through the decision of the Indian Government in March 2015 to increase the foreign direct investment cap in the insurance sector from 26 to 49 per cent.

With the increase in shareholding, Munich Re strengthens its presence in India which is one of the key markets for the company.

 Doris Höpke, the member of the Munich Re Board of Management, Munich Health, said, “India’s population structure, increased life expectancy and positive economic development will usher in a steep rise in medium-term healthcare spending. Since its start in 2007, Apollo Munich Health Insurance has shown exceptional, often above-market growth rates. With the increased stakeholding, we are strengthening our position for sustainable and profitable growth in this region. Apollo Munich Health Insurance is committed to make quality healthcare easy and accessible”

Axis Capital acted as the financial advisor to Apollo Hospitals group for the transaction.