The Hindu : Business : BNP Paribas to buy 49.9 p.c. in Sundaram AMC

Online edition of India's National Newspaper
Tuesday, Oct 25, 2005

Business

Business

BNP Paribas to buy 49.9 p.c. in Sundaram AMC

Special Correspondent

The deal will fetch Sundaram Finance Rs. 100 crore

CHENNAI: The Chennai-based non-banking finance company, Sundaram Finance Limited (SFL), has decided to offload 49.90 per cent holding in its wholly owned subsidiary, Sundaram Asset Management Company Ltd. (SAMCL), to BNP Paribas Asset Management.

An agreement to this effect was signed between the two on Monday. The deal will fetch SFL Rs. 100.38 crore. It is, however, subject to various regulatory approvals. The transaction is expected to be complete by the first quarter of 2006. Following this, SAMCL will be re-named as Sundaram BNP Paribas Asset Management Company Ltd.

SFL, it may be recalled, had bought out the U.K.-based Newton in SAMCL in June 2002. Newton had been holding 39 per cent stake in SAMCL since the fund was launched in 1996. When Newton changed hands, the new management was not keen on the mutual fund business and, hence, exited from SAMCL by selling its stake to SFL for Rs. 10.53 crore. SAMCL has a capital base of Rs. 15 crore.

BNP Paribas AM is a fully owned subsidiary of BNP Paribas and is a major player in fund management and distribution. BNP Paribas has a banking presence in India and is also in the life insurance field through a tie-up. S. Viji, Chairman of SFL, said in a release that the joint venture would combine the strength of the Sundaram Finance brand and the national retail reach and investment management skills of SAMCL with the international product expertise and global network of BNP Paribas AM. "With this joint venture, we are well positioned to build on the already strong platform that has been established by SAMCL," the release quoted him as saying.

Gilles Glicenstein, Chairman of BNP Paribas AM, said in a release, "with this partnership, we strengthen our already significant presence in new markets where we currently manage Euro 15 billion.''

T. T. Srinivasaraghavan, Managing Director, SFL, said BNP Paribas would have two nominees on the ten-member board of SAMCL. SFL would have three and the rest would be independent directors as mandated by the regulator. T. P. Raman, Managing Director of SAMCL, said the arrangement with BNP Paribas AM should be seen in the light of the way the business was going global.

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