Ambani brothers bury the hatchet
The two Ambani brothers seem to be burying the hatchet — for the second time. The two groups announced Sunday that all non-compete agreements between them had been scrapped, with one exception. The Mukesh Ambani-led Reliance Industries will steer clear of gas-based power generation till 2022. This is being seen as an informal commitment to supply natural gas to the Anil Ambani-led RNRL.
RIL said in a statement that the two rivals have “... today approved and signed an agreement canceling all existing non-compete arrangements entered into ... in January 2006.” This will give both increased flexibility to participate in high growth segments such as oil and gas, petrochemicals, telecommuincations, power and financial services, the statement added. “These developments will eliminate any room for further disputes between the two groups, on matters relating to the scope and interpretation of the non-compete obligations.” A similar statement was issued by ADAG.
This comes less than a fortnight after the Supreme Court ruling in the RIL-RNRL dispute on natural gas supply. It is expected to help RIL: analysts say the oil giant can now deploy excess cash in areas such as power and infrastructure. Of the Anil Ambani firms, RNRL may benefit as there appears to be a commitment on natural gas supply. Gains for other firms are harder to pin down.
Key stocks of both groups have underperformed in the BSE Sensex in the past year. n More in Business
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