Bharti exits, RIL enters in insurance JVs with AXA

New Delhi: After nearly five years of its association, Bharti group on Friday exited from its financial services joint ventures with French firm AXA and sold its entire 74 per cent stake in both general and life insurance businesses to Mukesh Ambani-led RIL for an undisclosed amount.

"The decision is in line with Bharti's strategy of focusing its energies and financial resources in businesses where it is making a deeper impact both in India and overseas.

Currently, the financial services ventures do not fit into Bharti s long-term growth plans," the company said in a statement.

The company had entered into these joint ventures with the AXA group in 2006 and held 74 per cent stake in both these ventures -- Bharti AXA Life Insurance and Bharti AXA General Insurance.

"It (Bharti) intends to use the proceeds from selling its interests in these joint ventures towards other group businesses in India and abroad," it said.

Bharti, a leading telecom player, has operations in 19 countries including 16 nations in Africa where it acquired Zain Telecom's assets last year for over $10.7 billion. It has accumulated mobile subscriber base of over 190 million. In a separate statement RIL also said that the company has reached an understanding with Bharti on acquiring its entire stake in JV with AXA.

"This sale is subject to necessary approvals from IRDA (insurance regulator), Competition Commission of India (anti-monopoly watchdog) and any other relevant/applicable authorities," Bharti said.

Bharti also said that it was in the process of offloading its stake in its JV with AXA for asset management. According to Reliance statement, RIL and its subsidiary

Reliance Industrial Infrastructure (RIIL) would effectively own respectively 57 per cent and 17 per cent in both the insurance companies and would become AXA's JV partners in India.

AXA would retain its current 26 per cent shareholding and would continue to manage the day to day operations of both JVs.

As per the existing regulations, the foreign partner in the insurance sector is allowed to have a maximum stake up to 26 per cent in the joint venture.