The proposed deal of Bharti Enterprises to hive off its 74% stake in the both the insurance joint ventures with Axa to Reliance Industries has been terminated by both the parties. Citing the concerns of disagreement over governance and long-term vision, both the companies mutually agreed to call-off the discussions.
Bharti Enterprises, one of India’s biggest business conglomerates having presence in telecom, retail, financial services, manufacturing and software holds a 74% stake in the insurance joint venture with AXA Asia Pacific Holdings Ltd (APH) having the remaining 26% stake. Bharti Axa Insurance venture launched its life insurance company in 2006 and general insurance company in 2008 and has created a good presence across India.
However, earlier this year, Bharti had expressed that they would sell of their stake to Mukesh Ambani led Reliance Industries and exit both the insurance joint ventures. The deal between Reliance and Bharti also received approval from Competition Commission of India (CCI) after they notified CCI about the proposed acquisition. The proposal would have enabled Reliance Industries limited (RIL) and its associate Reliance Industrial Infrastructure Limited (RIIL) to take over the general insurance as well as life insurance business from Bharti.
The deal between Bharti and Reliance was said to be valued at around Rs 1,665 crore ($370 million) and had it gone through then the long wait of Mukesh Ambani to enter the insurance sector would have been over. But it looks like Reliance Industries will have to wait for some more time before they can find inroads to the Insurance sector.