Aditya Birla Capital and Nippon Life plan to merge life insurance businesses 

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India (Commonwealth Union)_ According to sources, Aditya Birla Capital is reportedly in talks with Japan’s Nippon Life regarding merging their respective insurance companies if it becomes the winning bidder for the life insurance business of the financially troubled Reliance Capital Ltd. Nippon Life, a 49 percent shareholder in Reliance Nippon Life Insurance Company (RNLIC), is expected to consider a merger between Reliance Nippon Life and Aditya Birla Capital’s Birla Sun Life Insurance.   

Reliance Capital’s subsidiary, RNLIC, is undertaking the bankruptcy resolution procedure. Under IRDAI norms, an entity cannot float two life or non-life insurance firms. Therefore, Birla Sun Life will be required to combine with Reliance Nippon Life Insurance if its promoters become the winning bidder during the Reliance Capital resolution process.   

According to a source, Nippon Life’s shares in the merged firm would be reduced from the present 49 percent to about 15 percent, depending on the valuation of both insurance firms. The 28th of November is the deadline to submit binding proposals for Reliance Capital Ltd. and its subsidiaries. Reliance Capital has provided all bidders with two alternatives. Companies might submit bids for Reliance Capital Ltd and its eight subsidiaries or clusters under the first option. The second option allowed bidders to submit separate or combined bids for the company’s subsidiaries.   

Reliance Capital is offering eight firms for sale. Among these are general insurance, life insurance, health insurance, the securities industry, and asset reconstruction. The Reserve Bank of India (RBI) replaced the Reliance Capital board on November 29 of last year due to payment failures and major governance concerns. The central bank designated Nageswara Rao Y as the administrator for the company’s Corporate Insolvency Resolution Process (CIRP). In February of this year, the administrator designated by the RBI to oversee the sale of Reliance Capital solicited expressions of interest.

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