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INDIA BUSINESS WORLD - 16th JANUARY - TO - 31st JANUARY - 2009
MUNICH RE, THE WORLD’S LARGEST REINSURANCE FIRM BY REVENUES, IS PICKING 0.2% STAKE IN APOLLO ENERGY FOR RS 73.6 CRORE
MUNICH Re, the world's largest reinsurance firm by revenues, is picking 0.2% stake in Apollo Energy for Rs 73.6 crore, valuing the firm at a staggering $7.5 billion(Rs 36,835 crore), a person directly involved in the transaction said.
Apollo Energy is a privately held holding firm of the power and health insurance businesses of Prathap Reddy-led Apollo Hospitals Group.
With this transaction, Apollo Energy is now valued double than Tata Power and 50% more than Reliance Power, making it the most valued private Indian firm in the power business. But unlike Tata Power and Reliance Power, Apollo Energy also has interests in insurance business. v
It holds 74.5% in the health insurance joint venture Apollo DKV Insurance Company. Munich Re holds 25.5% in this JV through a whollyowned health insurance subsidiary, DKV International Health Holding. The two partners had initially committed Rs 108 crore in the JV which was formed in August 2007.
Interestingly, through this deal Munich Re will also indirectly hike its stake in the health insurance business. After this transaction, the German insurance firm’s total stake in Apollo DKV Insurance Company will inch up by 0.149% and would hold around 25.65% in the JV firm which would be well within the Indian foreign direct investment (FDI) norms, which prescribe a ceiling of 26% FDI in insurance sector.
Apollo Energy was established in 1997 to undertake power projects and has the mandate of spearheading Apollo Hospitals Group's diversification into the power sector. The company is also planning to acquire a holding-cum-operating company status for owing operating and developing power projects besides its existing downstream investments in Apollo DKV Insurance Company. Apollo DKV covers products like inpatient hospitalisation, personal accident cover, critical illness cover, overseas travel and health cover.
Apollo is India's largest group of hospitals with 42 large health care hospitals, 60 primary clinics and the largest retail chain in the country with over 600 pharmacies.
Apollo Hospitals have a significant exposure in telecom space also. The company along with Maxis Communications Berhad of Malaysia had bought out C Sivasankaran-promoted Sterling group's Aircel for Rs 4,860 crore in 2005.
DKV is Europe's largest health insurer and one of the world's top five private health insurers.
It is also a member of the ERGO Insurance Group and thus a part of the Munich re-groups, one of the world’s largest reinsurers.
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