Housing Development Finance Corporation (HDFC) on Wednesday said that it has agreed to acquire 51.2 percent stake in Apollo Munich Health Insurance for Rs 1,346.84 crore.

Of the total, the mortgage lender will acquire the entire 50.8 percent held by Apollo Hospitals Group for Rs 1,336 crore and 0.4 percent held by a few employees for Rs 10.84 crore.

The deal is subject to approval from the shareholders and the regulatory and may be closed in the next 9 months. The standalone health insurer will be subsequently merged with HDFC ERGO General Insurance wherein HDFC holds 50.49 percent stake.

At Rs 73 a share, the deal will give the Reddys, promoters of Apollo Hospitals group an over four-times premium to the Rs 300 crore they had invested in the joint venture in 2006. In addition, their joint venture partner Munich Health Germany will pay Rs 294 crore to Apollo Hospitals Enterprise and Apollo Energy to support the transaction.

While the agreement will help HDFC deepen its health insurance presence, it will help Apollo Hospitals cut down its debt taken by pledging shares.

Shares of HDFC were trading over one percent higher on Thursday morning and hit an intraday high of Rs 2,203.80 on NSE.