Mumbai: Shares of Max Financial Services soared 20 per cent to touch its highest trading permissible limit of the day as the company and Max Life Insurance will merge into HDFC Standard Life Insurance.
The stock zoomed 19.99 per cent to Rs 514.40 - its upper circuit limit - on BSE. At NSE, it surged 20 per cent to touch its highest trading permissible limit of Rs 514.50. Shares of HDFC too rose by 1.99 per cent to Rs 1,225.25 on BSE.
In the biggest consolidation in the country's private insurance sector, Max Life Insurance and Max Financial Services will merge into HDFC Standard Life Insurance. "The Board of Directors of HDFC Standard Life Insurance Company, Max Life Insurance Company and Max Financial Services ... approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance Company and Max Financial Services into HDFC Life by way of a scheme of arrangement," HDFC said in an NSE filing.
In a separate filing, Max Financial Services said the agreement provides for a mutually agreed exclusivity period for due diligence and discussions between the parties in relation to the proposed transaction.
The proposed arrangements would be subject to due diligence, definitive documentation and applicable board, shareholder, regulatory, respective High Courts/NCLT, and other third party approvals, as may be applicable, it added.
At present, 49 per cent FDI is allowed in the insurance sector in India.
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