Bharti and Reliance talks regarding Bharti's Insurance business break down

Earlier Reliance industries along with their sister company, Reliance Infrastructure Ltd had planned on buying a total of 74% stake in Bharti AXA Life Insurance and Bharti AXA General Insurance. 54% would be owned by Reliance Industries and 17% by Reliance Infrastructure.

Now things seem to have changed. Reliance has announced that they no longer will be buying the stake. They have cited reasons like vision and governance disagreements.

The move by Reliance was due to the lack of growth in its existing business's. Also the need to diversify and increase presence in non core business's was also a motive.

Bharti Enterprises on the other hand is in desperate need of funds. After the long drawn out and rather expensive deal in Africa, Bharti needs money. The $9 billion dollar deal through which Bharti bought Zain's African operations. Also the  setting up of the 3G network in India will take it financial toll as well.

The shareholders of both the companies are not very happy with this development. Reliance shares lost 2.5% value and Bharti Airtel lost 0.9% value in the share market.

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