The shares of Exide Industries Ltd gained nearly 9 per cent during the morning trade on Friday, after HDFC Life Insurance announced that it will acquire Exide Life Insurance from the Exide Industries for ₹6,687 crore.
At 10:02 am, Exide Industries was trading at ₹193.90 on the BSE, up ₹15.65 or 8.78 per cent. It had opened at ₹196.05 as against the previous close of ₹178.25. It hit an intra-day high of ₹202.95 and a low of ₹190.65. On the NSE, it was trading at ₹193.70, up ₹15.50 or 8.70 per cent.
Exide Industries on Friday informed the exchanges that its Board of Directors has considered and subject to the approval of its shareholders, approved the divestment of its entire equity shareholding in Exide Life Insurance Company Limited, a material wholly owned subsidiary of the company, by way of sale to HDFC Life Insurance Company Limited.
The total investment of the company in Exide Life, as on the date stood at ₹1,679.59 crore.
HDFC Life will acquire 100 per cent stake in Exide Life for an aggregate consideration of ₹6,687 crore, which is proposed to be discharged by way of payment of ₹725,97,77,930 as cash consideration, and issuance of 8,70,22,222 equity shares of the company at a price of ₹685 per equity share.
The completion of the acquisition is subject to customary conditions such as receipt of all regulatory and other approvals, HDFC Life said.
Upon completion of the transaction, Exide Life Insurance is proposed to be merged into HLIC. “We believe that transaction can result in value creation for customers, employees, shareholders and distribution partners. This transaction will provide an opportunity for HLIC and the Target to realise synergies arising out of complementary business models,” HDFC Life said.
The acquisition is expected to be completed before June 30, 2022.
HDFC Life was trading at ₹740.20 on the BSE, down ₹18.60 or 2.45 per cent. On the NSE, it was trading at ₹740.05, down 18.95 or 2.50 per cent.