In yet another mega deal in the history of Indian mutual fund industry, HDFC Mutual Fund has acquired Zurich India Mutual Fund. This deal will make HDFC AMC the second-largest mutual fund in India, with assets worth Rs 10,237 crore as on February 28, 2003. Zurich Financial Services -- the promoter of the Zurich India AMC -- made the announcement of the sale on March 16, 2003. Zurich Financial, a global insurance major, decided to exit its Indian operations as it wants to get out of non-core areas and non-profitable businesses.
The deal that is likely to cost HDFC Mutual fund Rs 160 crore, is a second such big sell-off in the past one year. The first was Franklin Templeton Investments' buy out of Pioneer ITI Mutual Fund, which the former picked for Rs 250 crore. The actual purchase of Zurich India AMC is likely to be completed in the next 4-6 months. The merged entity will have a wide range of mainstream equity and bond funds. Interestingly, last month, HDFC Mutual had aggressively bid for Alliance Capital's Indian mutual fund operations. But a last-minute change of mind by Alliance prevented the deal from going through.
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What does the takeover mean for investors?
There is no need to press the panic button. As of now, there are no indications that there will be a change in management at the helm. But this family of open-end funds allows you with a ready exit option anyway.
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