In an unexpected move The Hindustan Times, a unit of India’s K.K. Birla Group, is reportedly shelving plans to form an Indian life insurance subsidiary in partnership with Britain’s CGNU.
A report from Reuters News Agency said an official announcement was due Monday, and indicated that “a senior industry source” had said that the media group had concluded that the substantial investment required didn’t fit into their business plans.
CGNU was reportedly determined to continue its efforts to enter the newly opened Indian life market, which now allows foreign firms to have up to a 26 percent interest in insurance ventures with Indian companies, and was seeking to find a new partner for a life insurance joint venture.
The breakup doesn’t affect CGNU’s previously announced intention to begin offering general insurance products in 2001 in partnership with Bombay based Wadia Group.
This is the second time in a month that an Indian joint venture has been shelved. In October Allstate announced that it had dropped plans to to form a life insurance partnership with Dabur India Ltd. due to a change in its international strategy.
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