Indian insurer HDFC Life Insurance has apparently called off its long-running proposed merger with Max Life due to being unable to reach mutually agreeable terms, according to reports.

The initial planned merger was a complicated three-step process which involved Max Life merging with its parent firm Max Financial, and the resulting entity would then merge with HDFC Life. This was rejected by the Insurance Regulatory and Development Authority of India (IRDAI) in May, saying it violated section 35 of the Insurance Act, which prohibits merging an insurance company with a non-insurance company.

The firms tried to work out a new merger structure that conformed to IRDAI’s standards, but this was apparently unsuccessful.

The Economic Times reports that HDFC Life’s shareholders want to push ahead with an IPO as soon as possible, but pushing through with the merger is likely to delay that by at least a year.

“HDFC Life Insurance’s foreign partner, Standard Life Insurance, which owns a 35% stake, is not inclined to wait any more as it wants to list the joint venture at the earliest possible and any alternate merger proposal would have taken another year from now - that too without any assurance (that the deal would go ahead),” an executive knowledgeable about the deal was quoted as saying by the publication.


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