Reliance Industries Limited (RIL) and its associate Reliance Industrial Infrastructure Limited (RIIL) today ended negotiations for acquisition of Bharti group's 74 per cent shareholding in Bharti's two insurance joint ventures with France's AXA.
The negotiations were jointly terminated as both parties were unable to reach agreement on the long-term vision and joint governance of Bharti AXA Life Insurance Co Ltd and Bharti AXA General Insurance Co Ltd, RIL said in a statement.
RIL and Bharti AXA had, on 10 June 2011, announced that the parties had reached an understanding on the transaction, subject to negotiation and entering into legally binding agreements between RIL, RIIL and AXA.
They also said plans are afoot for obtaining necessary approvals from IRDA and other relevant/applicable approvals.
Reliance along with associate Reliance Industrial Infrastructure Ltd was to acquire 57 per cent and 17 per cent, respectively, in both insurance JVs.
Reliance was also keen to diversify into areas such as telecom and financial services.
Both RIL and Bharti have problems with their core businesses – oil and gas and telecom. Bharti's telecom business has been passing through a period of cash crunch following the $9 billion acquisition of African mobile operations of Kuwait's Zain last year amidst the launch of 3G network in India.
Reliance Industries, too, is going through a rough patch with falling output at its KG-D6 gas field. It had also to rope in British petroleum major BP for technology support for raising output at the gas fields.