Reliance and Bharti AXA terminate deal

The two parties have mutually agreed to end the negotiation

Reliance Industries has finally called off the six months long negotiation to buy 74 percent of stake in Bharti AXA’s life insurance and general insurance joint venture. According to media reports, Reliance has stated, “the negotiation on the contemplated acquisition is 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 with AXA.”

In June, AXA and RIL said that they had reached an understanding where the latter, along with its associate Reliance Industrial Infrastructure (RIIL), was to acquire Bharti’s 74 percent stake in both the ventures. While RIL decided to acquire 57 percent, RIIL planned to buy the remaining 17 percent of Bharti's stake in the two insurance companies. The deal was cleared by the Competition Commission of India in July.

According to industry experts and media reports, the deal was valued at around Rs 1,660 crore and the reason for the fallout of the deal was a due diligence report conducted by RIL following the announcement of the deal in June.

Currently, it is not confirmed that Bharti would look for another round of buyer or not but it seems that the telecom giant wants to concentrate on its core business and exit from the insurance space.