Japan’s Nippon Life Insurance Co today signed the final agreement to acquire a 26 per cent stake in the Anil Ambani Group firm’s fund management unit,Reliance Capital Asset Management Company for Rs 1,450 crore.
The deal,first announced in January this year,is the largest Foreign Direct Investment (FDI) deal in any Indian asset management company till date.
Nippon Life will invest an aggregate value of Rs 1,450 crore (USD 290 million) to acquire 26 per cent stake in the Anil Ambani Group firm’s fund management unit,the company said in a statement.
Commenting on the development,Reliance Capital CEO Sam Ghosh said “we are delighted to sign the final agreements with Nippon and look forward to having them as our strategic partners in the mutual fund business. We will be filing our application with the regulators for approval and hope to conclude this transaction soon.”
The transaction pegs the valuation of Reliance Capital Asset Management at around Rs 5,600 crore (USD 1.1 billion).
“I am very pleased that we have entered into the final agreements about investment in Reliance Capital Asset Management. I believe that this partnership in the field of asset management will strengthen our relationship with Reliance Group,” Nippon Life President Yoshinobu Tsutsui said.
This deal further expands Reliance Capital’s partnership with Nippon Life. In October last year,Reliance Capital completed a 26 per cent stake sale in life insurance venture Reliance Life to Nippon Life for over Rs 3,000 crore.
Reliance Capital Asset Management (RCAM) manages around Rs 1,40,000 crore assets.
Nippon Life is a Fortune 100 company and the seventh- largest life insurer in the world. It is a leading private life insurer in Asia and Japan.
Some of the other major deals in the Indian fund management space in recent times include global investment fund T Rowe Price’s acquisition of a 26 per cent stake in UTI Asset Management for USD 142.4 million and LIC Mutual Fund’s 35 per cent stake sale to Japanese Asset Management company Nomura for USD 62.8 million.