The merger discussion between Aditya Birla Capital and Japan-based Nippon Life has likely failed. It is said that Nippon Life who owns a 49% stake in Reliance Capital-backed life insurance venture, Reliance Nippon Life Insurance Company Limited has refused to reduce its stake. The Anil Ambani-backed Reliance Capital along with its subsidiaries are currently undergoing insolvency resolution.

As per the PTI report, sources said that Nippon Life stake would have been diluted to below 10% following the merger and the Japanese firm is believed to be not comfortable with the idea of losing all the shareholders and the governance rights. Nippon Life was considering a merger between Reliance Nippon Life with Aditya Birla Capital-backed Birla Sun Life Insurance. Also, the report cited that as per the IRDAI guidelines, an entity cannot float two life or non-life insurance entities.

Thereby, it would be mandatory for Birla Sun Life to merge with Reliance Nippon Life Insurance if its promoters emerge as successful bidders during the resolution process of RCL. However, Aditya Birla did not respond to the query sent by PTI over the matter. The deadline for submitting bids including the resolution plan for Reliance Capital and its subsidiaries is currently set at November 28.

However, the due date for submitting bids has been extended on multiple occasions.