Subba’s Serendipitous moments

June 26, 2008

Ambanis power play — Business rivalry or sibling jealousy?

Two billionaires who occupy the number 5 and number 6 position in the Forbes World’s Billionaires list and who are brothers are involved in a bitter feud.

I guess the whole world is watching Anil Ambani’s consolidation play merging Reliance Communications with leading player MTN of South Africa. This merger would create the world’s seventh largest mobile operator.

Just as the talks progressed, Mukesh Ambani (elder brother of Anil Ambani) attempted to thwart the consolidation attempt by claiming a right of first refusal should the R-Com shares be sold as per a family agreement arrived at 3 years ago. Since very little is known of the family agreement apart from splitting the various businesses between them, it is difficult to comment on the claims made by the brothers.

Anil Ambani has threatened legal action against his elder brother.

So, what’s this feud all about?

Is it the fact that if the deal comes about Anil Ambani (the younger brother) would move ahead of his brother in the Forbes Annual Billionaire list? As per the Forbes report, Anil Ambani’s fortunes is valued at $42 billion, just a tad shy of Mukesh Ambani’s fortunes at $43 billion.

Is it merely a shadow boxing as there are implications on other listed companies under the two brothers? More importantly what impact it would have in another dispute whether the pricing of gas supply is involved?

The business world has seen its share of sibling rivalry being played out and the Indian business world has seen its fair share. Rather than being able to sort it out within the family environment (apparently both of them stay under the same roof), why have they chosen to enact the drama in full view of the world is something that is beyond my comprehension.

I wonder how the mother Kokilaben who played a major role in dividing the assets between the brothers would make a decision here.

Both brothers are geniuses. As the world waits to see how this would be resolved, I only hope that they don’t spend their time in sibling jealousy, but find a meaningful solution to this issue and other pending issues.

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  1. Mukesh Ambani is simply making a big noise over nothing.Its just a jealous older brother trying to hamper a prosperous younger brothers growth. The claims made by Reliance Industries Limited are baseless and were based on an agreement in 2006, which was signed only by Reliance Industries officials and was later overturned by the Bombay High Court.
    This deal would would create one of the world’s largest emerging-markets telecom operators with 115m subscribers spread across Africa, India and the Middle East.

    Comment by Rishabh — June 27, 2008 @ 10:12 pm | Reply

  2. I could very well be wrong, but this is what I have always believed about the Ambani Brothers and their business expansion strategy. Indians in particular who have strong family ties and values compared to any other ethinicity around the world, tend to “re”act passionately on family feuds. Coming from Indian family background with business savviness, the Ambanis are using the family feud mirage strtategy to expand their businesses at 2X times the normal rate. If it was one conglomerate under the Ambani’s together, their businesses couldn’t have grown to the level they have today (its my speculation), but with this family feud mirage strategy, they split the conglomerate in to two pieces & simply doubled it. I find it very hard to believe that the Ambani brothers are really fighting. Lets get real! The Daddy Ambani grew this kingdom from nothing. Having the same genes in them, the Ambani brothers are no “GREED” – “FEUD” rivals, but savvy business brothers who are aggressively pursuing to become the Worlds richest people within their lifetime or set the platform for their kids to take that Crown within the next 25 years!

    Comment by Vish Iyer — July 1, 2008 @ 10:19 pm | Reply

  3. Mukesh is just acting silly and naive… by now he should have understood what this MTN deal will mean to India as a whole. however his disregard towards the benifits with the sole intention to derail this project just proves his business sense and ethics. besides with MTN now extending the exclusivity period Mukesh should definitely think again and withdraw….

    the mtn deal with rcom is certainly something. i hope that this will come true and uplift the flagging india telecom industry. the only problem here is Mukesh. he’s like a perpetual thorn in Anil’s side, no matter where Anil goes or what he does Mukesh is just two steps behind to poke him.

    mukesh if you know even a squat of business sense you will pull back unless you want to fund your new billion dollar house construction with the spoils you derive from this war. apart from this its really disheartening to see such naive sibling rivalry.

    Comment by RENUKA — July 23, 2008 @ 4:01 pm | Reply

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