Wednesday, January 8, 2014

HDFC Life, Manulife among top bidders to acquire HSBC India insurance biz

HDFC Life and Manulife Financial Corporation of Canada are among top bidders to place first-round bids for HSBC plc's Indian life insurance business. As per the sources, the stake value is around Rs. 10,906 crore. HDFC Life is a joint venture insurance company between India's top mortgage lender HDFC Limited and British insurer Standard Life.

Among bidders to submit first-round bids are ICICI Prudential Life, a joint venture between India's No. 2 lender ICICI Bank and Britain's No. 1 insurer Prudential; and Birla Sun Life, a venture between Indian conglomerate Aditya Birla Group and Canada's Sun Life.

Europe's biggest bank HSBC plc is selling its 26% stake in a life insurance joint venture with two Indian state-run banks, as it sheds noncore businesses across the world.

Just after the finalisation of the deal, the winner of the auction will get immediate access to more than 5,500 branches of the two PSU banks- Canara Bank Ltd and Oriental Bank of Commerce Ltd. Bancassurance, an arrangement in which a bank and an insurance firm tie up so that the insurer can sell its products to the bank's customers, is emerging as a key tool to sell insurance products across Asia as the life insurance industry matures in the region.

“The biggest attraction for any Indian or foreign bidder in this joint venture would be the vast distribution network, which is absolutely essential in a country like India,“ said an official close to the development, adding, “There are a very few good partnership opportunities available for foreign players in India, this venture is one of them.“

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