Reliance Capital & Nippon to explore more deals

Anil Ambani-controlled Reliance Capital has signed a deal with Tokyo-based Nippon Life to consider selling a stake in its asset management arm and other businesses to the Japanese company. On Thursday, the two companies entered into a memorandum of understanding (MoU) under which Nippon Life “will evaluate collaboration opportunities including strategic partnerships” in all of Reliance Capital’s financial businesses. A joint statement by the two companies singled out asset management as a potential area. Commenting on the deal, Reliance Capital’s Anil Ambani said, “Nippon Life has already agreed to be our partner in the life insurance business, and we see great potential to work together across our other financial services businesses.” Earlier this year, Nippon Life decided to buy a 26 per cent stake in Reliance Life for Rs 3,062 crore, or $680 million, valuing the Anil Ambani group’s life insurance business at $2.6 billion. The transaction is awaiting regulatory clearances at present. Reliance Capital Asset Management, the AMC in which Nippon is likely to collaborate in, manages funds of $23 billion in mutual funds, pension funds, managed accounts and hedge funds and has over 7 million investors. Nippon Life Insurance, a $80-billion company, posted a profit of $3 billion in the last fiscal. The world’s seventh largest player in life insurance and the biggest in Asia and Japan, Nippon Life manage assets worth over $600 billion. Besides, asset management and life insurance, Reliance Capital’s other businesses include general insurance, broking, consumer and commercial finance. The MoU includes these businesses as well.