Nippon Life signs final agreements to buy 26% in RCAM

Japan's Nippon Life Insurance Co today signed the final agreement to acquire a 26% stake in the Anil Ambani Group firm's fund management unit, Reliance Capital Asset Management Company (RCAM) 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 ($290 million) to acquire 26% stake in the Anil Ambani Group firm's fund management unit, the company said in a statement.

Commenting on the development, Reliance Capital Chief Executive Officer 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 RCAM at around Rs 5,600 crore ($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% stake sale in life insurance venture Reliance Life to Nippon Life for over Rs 3,000 crore.

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% stake in UTI Asset Management for $142.4 million and LIC Mutual Fund's 35% stake sale to Japanese Asset Management company Nomura for $62.8 million.