Nippon Life Insurance has acquired a 26 per cent stake in India's Reliance Life Insurance for Rs3,062 crore ($724 million).

The agreement effectively gives Reliance a total value of Rs11,500 crore. The Indan private sector insurer has been looking to partner with a foreign company to expand its insurance offering for the past months. As of 31 December 2010, the firm recorded over Rs17,000 crore ($3.7 billion) in assets under management.

According to an article by the Financial Times, both companies have been in talks for the last half year but a resolution had not been made due to valuation concerns. A decision on the deal was announced mid-March 2011.

"As a strategic partner, Nippon Life will bring vast experience, expertise and global best practices in areas of product development, underwriting, investment management, distribution, customer relationship management, and risk management," Sam Ghosh, chief executive of Reliance Capital, said in a statement.

Based on present foreign ownership rules, a foreign company can own up to a 26 per cent interest in an Indian insurance firm. Reliance Life is 100 per cent owned by Reliance Capital, which is chaired by Indian billionaire Anil Ambani.