The Board of Directors of HDFC Life, Max Group approved the merger of the life insurance business between the entities through a composite Scheme of Arrangement.

As a part of the proposed transaction, the life insurance business of Max Financial Services, currently held in Max Life, would demerge into HDFC Life, the company said in the BSE press release.

Here are 6 highlights of the merger of life insurance business:

1. As per the agreed valuation and exchange ratio, the relative valuation of HDFC Life and Max Life would be 69% and 31% respectively.

2. The proposed transaction is expected to become effective in the next 12-15 months.

3. Proposed Transaction creates a Rs 255 billion annual premium company, with scale, differentiated portfolio and wider reach to expand in a growing life insurance sector.

4. After completion of the proposed Transaction, HDFC Life would be listed on the NSE and BSE.

5. HDFC Life has also entered into a Trademark License Agreement to use the 'Max' brand as part of life products that will transition from Max Life, for seven years post completion of the proposed transaction.

6. For the demerger of the life insurance undertaking from Max Financial Services into HDFC Life, shareholders of Max Financial Services, will get 2.33 shares of HDFC Life for each share of Max Financial Services.

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