Munich Re's Ergo to raise stake in joint venture with HDFC for Rs 1,122 crore

After the deal, Ergo's stake in HDFC Ergo General Insurance will go up to about 49%

Munich Re's insurance unit Ergo has agreed to buy nearly 23% more in its India joint venture with Housing Development Finance Corp for Rs 1,122 crore ($169.03 million), in the latest deal in India's insurance sector after foreign ownership rules were eased this year.

After the deal, Ergo's stake in HDFC Ergo General Insurance Co will go up to about 49% - the maximum foreign holding allowed in Indian insurance companies under the new rules - the companies said on Thursday.

India, which previously capped foreign stake in insurance companies at 26%, raised the ceiling in March, leading to a flurry of deals in the sector.

 

HDFC, the top Indian mortgage lender, will own 50.7% of HDFC Ergo after the deal.

HDFC's life insurance joint venture partner, Britain's Standard Life plc , said in August it was seeking to raise its stake in that joint venture to 35% from 26% for 169 million pounds ($252.20 million).

($1 = 66.3776 Indian rupees)

($1 = 0.6701 pounds)