The Anil Dhirubhai Ambani Group-promoted Reliance General Insurance is looking to buy a majority stake in its rival Royal Sundaram, while talks are in advanced stages to bring in Swiss Re as foreign partner in its life insurance venture.
While talks have reached advanced stages for the sale of 10-15 per cent stake in Reliance Life to Swiss Re for an estimated Rs. 1,500 crore, a possible buy-out of Sundaram Group's 74 per cent stake in Royal Sundaram Alliance Insurance could take some time due to regulatory issues, sources in the know of the developments said.
Though the deal size could not be ascertained, it can be noted that Royal Sundaram has mopped up Rs. 820 crore premium in the first 11 months of this fiscal as compared to Rs. 1,847 crore premium collected by Reliance General.
If successful, it would be the first time that a general insurance firm acquires a rival and therefore the relevant guidelines need to be sought from the sectoral regulator Insurance Regulatory and Development Authority (IRDA).
In the life insurance space, such a deal has happened in the past when Reliance Life acquired AMP Sanmar in 2005.
