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Ambani brothers to compete in business as Mukesh purchases telecoms firm

Mukesh Ambani, the second-generation head of Indian conglomerate Reliance Industries, announced on Friday that the business is to purchase a substantial stake in telecommunications company Infotel Broadband Services.
 
The acquisition puts Mukesh's company in direct competition with his brother Anil's Reliance Communications.
 
The deal will see Reliance Industries invest around $1 billion into the company in return for a 95% share. Infotel, which won the bidding for national broadband access in the new 4G networks, will become a subsidiary of Reliance Industries.
 
Commenting on the deal, chairman and managing director of Reliance Industries, Mukesh Ambani said: "We see this as the next wave of value creation opportunity in the wireless broadband space. We believe this will pole-vault India's economy into the digital world at an accelerated pace."
 
Mukesh, 53, was able to enter into the telecoms industry after he and Anil, 50, agreed to scrap non-competition agreements between their respective conglomerates in May. (Continue reading here)
 
The brothers signed the non-competition agreements in 2006 after their deceased father's Reliance empire was split into two separate entities, Reliance Industries and Reliance ADA Group, in 2005. Anil took control of the communications businesses, meaning Mukesh was prevented from entering the industry.
 
The agreements proved a constant source of contention between the siblings, known internationally as much for their feuds as their business acumen, and it was hoped the removal of the restrictions would allow the brothers to concentrate on their businesses as opposed to one another.
 
Reliance Industries is India's largest private sector company, with a net worth as of March 2010 of $30.6 billion. 

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