DLF sells 74% insurance JV stake to Dewan Housing
26 July 2013
India's second-largest housing financier Dewan Housing Finance Ltd (DHFL) bought Mumbai-bsed property developer DLF's 74-per cent stake in DLF Pramerica Life Insurance Company Ltd (DPLI) for an undisclosed sum, marking its diversification from property mortgage to insurance
The deal is subject to regulatory approvals.
Though the financial details were not disclosed, according to analysts believe the deal size may be around Rs350 crore.
Under the terms of the agreement, DPLI is proposed to be renamed DHFL Pramerica Life Insurance Company Ltd (DHFL Pramerica). The business of the current entity will continue without interruption and the current management will continue to run the joint venture.
DPLI is a joint venture between DLF and US-based Prudential Financial Inc (PFI), which has 26-per cent share in the firm.
Kapil Wadhawan, chairman and managing director of DHFL said the company is thrilled to announce this joint venture with PFI.
''We feel very excited to be partnering with an organisation having a deep understanding of the life insurance business, risk management practices and insurance expertise in various international markets. PFI with its life insurance expertise, coupled with DHFL's strong knowledge of the Indian retail financial services market, will create a solid foundation for this life insurance JV company here in India,'' he added.
Tim Feige, senior vice president and PFI's international insurance group executive said DHFL's strong branch network across India and deep knowledge of the retail financial services market will enable the business to enhance the products and services it provides to existing customers and partners.
The stake sale in the joint venture is part of DLF's strategy to divest non-core assets to pare debt, a company statement said.
DPLI started operations in India on September 1, 2008 and has a pan India presence through its agency and third party distribution channels.
In December 2010, DHFL had bought the Indian housing finance business of Germany's Deutsche Postbank, Deutsche Postbank Home Finance, for Rs1,079 crore (See: Dewan Housing signs Deutsche Postbank Home Finance deal for Rs1,079 crore)