Standard Life's insurance outfit in India, a minority joint venture with the country's HDFC bank, has initiated exploratory merger talks with Max Life Insurance and Max Financial Services.

All parties concerned confirmed the talks in a statement to stock exchanges in London and Mumbai on Friday (17 June). Standard Life said: "We note that HDFC Standard Life Insurance Company, Max Life Insurance Company and Max Financial Services have entered into a confidential, exclusive and standstill agreement to evaluate a possible merger between those parties.

"Any deal would be subject to board, shareholder, regulatory and court approvals. There is no certainty a deal will take place."

Max Financial Services and HDFC confirmed the same in Mumbai. India's investment norms currently permit 49% foreign direct investment in an insurance sector company.

Companies concerned said potential final holdings and financials would be released at in "due course". At present, HDFC holds 72.37%, while Standard Life holds 26.00% of equity in the joint venture, with the rest in hands of minority third party shareholders.

HDFC Standard Life has over 400 branches, and a presence in nearly 1,000 Indian cities, along with a liaison office in Dubai. Its business primarily consists of unit-linked insurance policies. At its last public filing on 31 March, HDFC Standard Life had ₹742.5bn (£7.7bn, $11.1bn) in assets under management.

If the merger goes through, it would create India's largest private insurance company. Potential combined business volumes of the merged entity would see it overtake ICICI Prudential, which is currently India's largest private insurer.