The Telegraph
Since 1st March, 1999
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Anil wins Sanmar, loses whiz-kid

Mumbai, July 31: Anil Ambani today added another prized acquisition to his newly set-up Anil Dhirubhai Ambani Enterprises (ADAE) when his group announced that Reliance Life Insurance Company Limited, a subsidiary of Reliance Capital Ltd, has agreed to acquire 100 per cent of AMP Sanmar Life Insurance Company.

AMP Sanmar Life is a 26:74 joint venture between AMP Life of Australia and Sanmar group of India. AMP Group had, in early June, announced its intention to pull out of the venture following which Sanmar group has also been on the look out for a buyer to sell its stake.

“The acquisition will mark the entry of RCL into life insurance in one of the world’s fastest growing and most under-served market,” a spokesperson for the ADAE group said on Sunday.

By virtue of acquiring the 100 per cent stake in AMP Sanmar Life, Reliance Capital becomes the first private Indian firm to enter life insurance without a foreign partner.

Both sides remained silent on the value of the deal, but industry watchers say the amount could be close to Rs 300 crore. AMP-Sanmar had recently hiked its capital to Rs 217 crore.

Only last week, Reliance Life Insurance Company had renewed its application with the Insurance Regulatory Development Authority (IRDA) ' a move that entailed a capital commitment of Rs 200 crore. So far, the group has been in the general insurance business through the subsidiary, Reliance General Insurance Company.

The acquisition comes close on the heels of another significant buyout made by the ADA Enterprises through Reliance Capital when it acquired the entertainment and media software company, Adlabs, for Rs 360 crore. So, this month alone ADA Enterprises has footed two acquisition bills worth over Rs 630 crore.

Last week, Reliance Capital had informed exchanges that its subsidiary, Reliance Life Insurance Company, was in talks to acquire AMP Sanmar Life Insurance company, which has a capital base of Rs 217.5 crore, 90 offices across the country with over 9,000 agents.

AMP-Sanmar Life admitted on Friday it was in talks with ‘several companies’ to sell out but denied it had already zeroed on Reliance Capital. “We are talking to several firms. No deal has been arrived,” said Graham Meyer, managing director, AMP-Sanmar Life.

After completion of its ongoing equity infusion, RCL will have a net worth of nearly Rs 4,500 crore, ranking it among the top three private banking and financial services companies.

Industry experts say Ambani must have made a generous offer to close the deal as quickly as possible, given that many foreign players were keen to snap up Sanmar.

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