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Merrill Lynch to buyout Kothari

US investment bank Merrill Lynch said on December 7, 2005, it would boost its 40 per cent stake in an Indian joint venture to 90 per cent for about $500 million, buying the extra ownership from the local co-founder.

Merrill Lynch said the increased ownership of Indian investment bank DSP Merrill Lynch would enable the Wall Street firm to build its presence as one of the leading securities firms in India.

Hemendra Kothari, who co-founded the bank, will continue as chairman and take on added responsibility as a vice chairman of Merrill Lynch International, supporting its growth plans globally and helping Indian companies expand internationally.

Merrill Lynch's relationship with DSP began in the 1980s and grew into a joint venture in 1995. The business will continue to operate under the DSP Merrill Lynch name.

The deal, which is expected to close in the first half of 2006 subject to various regulatory approvals, comes at a time of increased merger and acquisition activity in India and a boom in the country's equity markets.

Investment banks are stepping up the pace in India, where the economy is expected to grow 7.5 per cent in the year to March 2006 and the stock market has hit record highs recently on the back of more than $8.8 billion in foreign fund investment.

Citigroup has said it is keen to expand in India.

J.P. Morgan Chase & Co. said on Monday it would double its staff in India and plans to hire 4,500 graduates over the next two years as it moves one-third of its investment banking back office and support staff offshore by the end of 2007. 


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