Reliance Ends Talks to Buy Bharti Stake in Ventures With Axa
Reliance Industries Ltd. (RIL), India’s biggest company by market value, ended talks to acquire Bharti Enterprises Ltd.’s stake in its general and life insurance joint ventures with Axa SA (CS), Europe’s second-largest insurer.
Bharti, the holding company for India’s biggest mobile- phone operator, Bharti Airtel Ltd. (BHARTI), entered the insurance business in 2006 and held a 74 percent stake in both ventures. India limits foreign ownership in insurance to 26 percent.
Negotiations “are being jointly terminated as a result of the parties being unable to reach agreement on the long-term vision and joint governance of the ventures,” Reliance said in an e-mailed statement today.
In the deal announced in June, Reliance Industries was to hold 57 percent and Reliance Industrial Infrastructure Ltd. (RIIL) 17 percent in both insurance companies. Axa would continue to own 26 percent in the ventures. The Paris-based company had the option to acquire an additional 24 percent in the businesses, if local regulatory changes allow greater foreign ownership in insurance, according to the announcement in June.
Bharti AXA Life collected premiums of 7.9 billion rupees ($151 million), in the year ended March 2011 while Bharti AXA General Insurance got premiums worth 5.5 billion rupees.
To contact the reporter on this story: Pooja Thakur in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Andreea Papuc at Apapuc1@bloomberg.net.