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Corporate Apr 3, 2013

The Ambani mega-deal and the Mahabharata complex

By Venky Vembu

For anyone with an interest in family dynamics and business history, the on-off relationship between the Ambani brothers - Mukesh and Anil - always made for a fascinating case study.

Here are two siblings, who inherited one of India's biggest business empires from a father who, quite literally, fashioned a rags-to-stupendous-riches story on the strength of a can-do entrepreneurial spirit - and the ability to grease the tracks of politicians and bureaucrats and fashion policy to his advantage.

And, yet, with a whole new world of business opportunities in front of them, in an India on the fast track of economic growth, the brothers Ambani cleaved the family fortunes and literally went to war against each other. For a long while, the business press was plied with a steady stream of unflattering stories that each brother planted in the media against the other - which gave their business rivals much cause for merriment, and a chance to laugh all the way to the bank.

The Ambani brothers. Reuters

The Ambani brothers: back in business together. Reuters

In the hands of a government that was less solicitous of corporate interests, such graphic unveiling of the underbelly of the business side of things - by insiders who knew it all - would have been lethal ammunition. But successive governments proved rather less interested in enforcing the rule of law than in fashioning a truce between them that would take all the public laundering of dirty linen off the front pages of the pink press.

At its worst, the sibling rivalry may have resembled a sordid Bollywood story, but in fact the template for the drama derived from a rather more ancient script: the Mahabharata, the epic tale of family intrigue, where brother turns against brother and family fortunes turn on a roll of the dice, so to speak.

It appeared at one stage that the Ambani brothers would rewrite the wisdom of the ancient saying that "wealth does not pass through three generations" by abridging that time-frame. Psychoanalysts may offer a rational explanation to account for why a brother who was rich beyond anyone's wildest dreams would nurse envy - and that too for his own sibling - but to lay observers of this soap opera, it boggled the mind. Even the entreaties of the matriarch of the family, their mother, which typically works to a nicety in Bollywood dramas, did not work in real life.

In any case, with the dramatic announcement on Tuesday of a mega-deal between their corporate entities, the brothers Ambani have sought to bury the hatchet - and open up the possibility of a familial reconciliation that could alter their business fortunes. According to media reports, which quote unidentified sources with intimate knowledge on the inner workings of the Ambanis' empires, the seeds for the deal were sown at a party in January this year to celebrate the wedding of Mukesh's niece Nayantara, which Anil attended. "It was here that the two brothers discussed coming together for business purposes," the report adds.

The ice having been broken at that interface, interlocutors on both sides evidently met and fast-tracked an agreement that leveraged the strengths of both the empires. The brothers evidently met from time to time to steer the discussions and bring them to fruition.

Tuesday's business deal, which builds on corporate synergies and holds out the prospect of better efficiencies, has adequate chatter value in and of itself. But the back-story of the Ambani brothers' tortuous, on-off relationship enhances the drama quotient of the handshake of megabucks in business suits. It holds out the possibility that more such deals could be in the offing.

This modern-day Mahabharata story, it appears, will yet see more twists and turns.

(Disclosure: The Reliance Group has funded the promoter of Network18, which publishes Firstpost)

by Venky Vembu

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