Apollo to divest 23.3% stake in Apollo Munich to JV partner

Proposed deal values Apollo Munich at Rs 703 cr; Apollo Hospital Group's holding to come down to 51.1% from 74.4%

The board of directors of Apollo Energy Company Limited, an Apollo Hospitals Group company, has approved the divestment of 23.3 per cent shareholding in Apollo Munich Health Insurance Company Limited to its joint venture partner, Munich Re of Germany for Rs 163.5 crore. The proposed transaction values Apollo Munich at Rs 703 crore.

Post divestment the Apollo Hospitals Group's shareholding in the insurance arm will come down to 51.1 per cent from the present 74.4 per cent. Similarly Munich Re's stake will move to 48.7 per cent while 0.2 per cent will be held by employees.

Apollo Munich chairman Pratap C Reddy 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".

Apollo Munich has around 8 per cent of the retail health insurance market and covers over 4 million members.

With the increase in shareholding, Munich Re strengthens its presence in India, which is one of the key markets for the company. " 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 grown exceptional, often above-market growth rates. With the Increased stake holding, 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," Doris Hopke, member of the Munich Re Board of management responsible for Munich Re said.

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