India's estranged billionaire Ambani brothers, who split the family empire in 2005, today agreed to compete against each other for the first time, easing a dispute that stalled a power generation project and a telecoms merger.
Mukesh Ambani and Anil Ambani, the world's richest siblings, scrapped all existing non-competition agreements between their business groups, and said they hoped "very soon" to negotiate a deal for supplies of natural gas from India's largest field.
India's Supreme Court this month ordered the brothers to rework a gas-supply agreement that Anil Ambani said entitled his company buy the fuel below a government-set price. Negotiations will "eliminate any room for further disputes between the two groups," according to the statements today.
Reliance Industries Ltd., run by Mukesh, and the Anil Dhirubhai Ambani Group Ltd., led by his younger brother, said in statements they will not compete in gas-based power generation.
Reliance Industries won a lawsuit against Reliance Natural Resources Ltd., an Anil Ambani group company, this month over the sale of natural gas from the KG-D6 field in the Bay of Bengal.
In the years since the two brothers split their father's company, their feud has halted plans for a major north Indian power plant and led to a court battle and a scuttled merger between Anil Ambani's Reliance Communications Ltd. and South Africa's MTN Group Ltd.
'Hopeful and Confident'
The brothers' companies said in statements they "are hopeful and confident that all these steps will create an overall environment of harmony, co-operation and collaboration between the two groups."
Boards of both groups have agreed to scrap the 2006 agreements that barred competition between them, the company statements said.
Under the 2005 pact to split the Reliance group, Mukesh kept the petrochemicals, oil and gas units along with the flagship company, Reliance Industries. Anil got newer businesses such as power, telecommunications, financial services and entertainment. Both retained rights to the Reliance name.
In October 2007, Anil's side of the business complained to the Indian markets regulator that Reliance Industries was trying to stall the initial public offering of the younger brother's Reliance Power Ltd.
Nine months later, Anil's mobile phone services company, Reliance Communications, called off merger talks with MTN Group after Reliance Industries threatened to block the sale if it wasn't given the first option to buy shares in Reliance Communications.
To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.
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