New Delhi: Nearly a year after scrapping the non-compete agreement between them, the Ambani brothers Friday came into direct competition with each other with the elder sibling Mukesh-led group`s entry into the insurance business.
Younger brother Anil-led group`s Reliance Life Insurance and Reliance General Insurance are already among the leading private sector players in their respective businesses.
The two companies already compete with Bharti AXA Life Insurance and Bharti AXA General Insurance, in which Mukesh-led Reliance Industries group has acquired a majority stake from Sunil Mittal-led Bharti group.
As per a deal announced Friday, Bharti group would exit from its joint ventures with AXA ventures sell its stakes to the RIL group. The two ventures would now be run in partnership between RIL and the French financial services major AXA group.
About a year ago, the two Ambani brothers had decided to bury their differences and announced on May 23, 2010 a truce deal, that also involved scrapping of a nearly five-year-old non-compete agreement between their groups.
Soon after that, the Mukesh Ambani group had started its planning for entry into financial services business. Earlier this year, it announced a joint venture with global private equity firm DE Shaw group.
However, it has not yet been finalised yet what businesses would be undertaken by the RIL-DE Shaw venture, while the deal to partner AXA group is specifically for the insurance business.
So far between the two brothers, the financial services business has been a domain of Anil Ambani.
Before their separation, Anil was considered an expert on financial matters and Mukesh has a reputation of rolling out businesses of unheard of size.
RIL is also said to be planning to enter mutual fund and private equity businesses as well.
Anil Ambani group is already present in a host of financial services businesses, including insurance, mutual funds, brokerage and non-banking financial services.
RIL has already set up a few subsidiaries for financial services business, namely Reliance Retail Finance Ltd, Reliance Retail Insurance Broking Ltd, Reliance Financial Distribution and Advisory Services Ltd and Reliance Retail Travel and Forex Services Ltd.
Speculations had started building up for RIL`s financial services foray after the DE Shaw deal was announced and there were expectations for some announcements in this regard for the company`s AGM earlier this month.
However, Mukesh Ambani was silent on specific details for financial services business at the AGM. The billionaire industrialist, still, mentioned that RIL would partner world leaders for entering new businesses in the country.