Indian energy giant Reliance Industries said Friday it had abandoned talks with Bharti Enterprises to buy out its 74 percent stakes in two insurance joint ventures with France's AXA. The companies had given no value for the proposed deal but analysts said it was worth around 50 billion rupees ($956 million).
Reliance announced in June plans to buy out Bharti's stakes in the joint ventures - Bharti AXA Life Insurance and Bharti AXA General Insurance - as part of a drive to diversify beyond its main energy activities. Bharti Enterprises is parent of Bharti Airtel, India's top mobile firm by subscribers, while AXA is Europe's second-largest insurer.
AXA, Bharti and Reliance Industries "have mutually agreed to terminate their negotiations on the proposed acquisition," Bharti said in a statement. Reliance said in a statement the discussions to buy Bharti's 74 percent stakes in the life insurance and general insurance joint ventures were ended because it could not reach agreement on a "long-term vision" for the insurance ventures with AXA.
Reliance, India's largest listed company, has been seeking to bolster its sagging energy revenues by moving out of the fuel sector into such industries as financial services and telecommunications. It also has a large retail operation. Bharti Enterprises established the joint ventures - Bharti AXA Life Insurance and Bharti AXA General Insurance - with AXA in 2006. Bharti has been seeking to pay down debt after its $10.7-billion acquisition of the African mobile operations of Kuwait's Zain last year and the costs of rolling out its high-speed third-generation (3G) network in India.
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