Realty firm DLF has decided to exit the life insurance business.
It has decided to sell its 74 per cent stake in its joint venture, DLF Pramerica Life Insurance, to Dewan Housing Finance. The sale consideration is put at around Rs.350 crore.
DLF announced is foray into the life insurance business in 2001 through a joint venture with U.S. insurance giant Prudential Financial’s arm. The Indian realty firm held 74 per cent in the joint venture. The balance was held by Prudential International Insurance. The joint venture had reported a combined loss of over Rs.250 crore during the past two fiscals.
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“The company, on Thursday, signed definitive agreements to sell its 74 per cent stake in the life insurance joint venture to Dewan Housing Finance and its group entities,” the company said in a statement.
Although the company did not disclose the value of the deal, insiders said it could be worth Rs.350-400 crore. “These agreements are subject to regulatory approvals. The transaction consideration shall be disclosed post receipt of all such approvals,” it said. “This transaction is in line with our ongoing strategy to divest non-core businesses or assets. We have had a very cordial relationship with Prudential, and wish them the best in their new partnership with DHFL,’’ DLF Group CFO Ashok Tyagi said in the statement.
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PTI reports:
Commenting on the deal, DHFL Chairman and Managing Director Kapil Wadhawan said, “This joint venture will help DHFL extend its philosophy of financial inclusion by broadening the range of products and services available to our customers , across India, especially in Tier 2 and 3 cities and towns.’’ DHFL believes that this joint venture would generate long-term value for its shareholders, he said.
“This new partnership also reinforces Prudential Financial Inc.’s commitment to building a strong presence in India, a country whose future growth over the long-term will enhance our 138-year history of providing financial security to customers across the world,’’ Tim Feige, Senior Vice-President and International Insurance Group Executive at PFI said.
DLF has been selling its non-core assets and business to focus on core business of real estate. It has already exited from the wind energy business and has entered into an agreement to sell its luxury hospitality chain, Aman Resorts.
The country’s largest realty firm has raised almost Rs.10,000 crore in the last three years through divestment of its non-core business.