Amid reports of Allianz’s exit from Bajaj Finserv, billionaire Mukesh Ambani-led Jio Financial Services are reported to set up a joint venture with the German financial services. The two multinational companies are planning to collaborate in the insurance sector in India.
According to Bloomberg, Allianz and Jio Financial Services are aiming to establish a general insurance and life insurance company. The discussions are in the early stages, and there is no confirmation if the two parties will proceed with the plan. Both Jio Financial and Allianz refused to comment on the ongoing speculations. Earlier, Jio announced its collaboration with Blackrock Inc. to venture into the asset management industry in India.
This development comes after Allianz indicated to end of a two-decade-old partnership with Bajaj Finserv. The German company has been looking to buy new stakes in new insurance firms to retain its presence in the South Asian country. "Allianz has indicated to Bajaj that given its strategic priorities, it is actively considering an exit from the life and general insurance joint ventures. It has indicated that it remains committed to the Indian insurance market but will not speculate on alternatives," said Bajaj Finserv in an exchange filing on Tuesday. Bajaj Finserv and Allianz are partners in Bajaj Allianz General and Life Insurance companies.
The reports suggest that Allianz’s exit is in the wake of a dispute over the direction of the partnership. Bajaj Finserv is reportedly not allowing the German insurer to raise its stake at a discounted price, said the report. German insurer Allianz and Bajaj Group formed a partnership in 2001 with Allianz holding a 26 per cent stake. Its exit from Bajaj Group will prompt the Indian company to either buy out or stake a sale to new investors or disinvestment through IPO. The split will not affect the operations of the company as the foreign partner’s participation is limited to board level.
