BNP PARIBAS TO ACQUIRE 49.9 PERT CENT IN SUNDARAM AMC
The Economic Times/The Financial Express/Business Standard/The Hindu Business Line/The Financial Express/The Pioneer, 31 December, 2005
Place : Chennai/Mumbai
European banking and financial services major BNP Paribas is to pick up 49.9% stake in Sundaram Asset Management (Sundaram AMC) for Rs 100.4 crore from Sundaram Finance (SF). The joint venture would be named `Sundaram BNP Paribas Asset Management'' and the transaction is expected to be completed in the first quarter of `06.
The foreign company has paid a price of about 7% of the asset under management of Sundaram MF. Sundaram AMC presently manages assets of over Rs 2,800 crore, of which about 50% is in equity. S Viji, chairman, Sundaram Finance, said on Monday: "With this joint venture, we are well positioned to build on the already strong platform that has been established by Sundaram AMC. We believe that the partnership will put the company on a faster growth path."
The AMC was started in 1996 as a joint venture between SFL (61%) and Newton Investment Management (39%). Following the acquisition of Newton by US-based Mellon Financial Corp, SFL acquired Newton"s 39% in the company.
Since'02, Sundaram AMC has been operating as a 100% subsidiary of SFL. That time, it had Rs 850 crore in assets under management. In the last three years, the independently managed AMC has improved its size more than three times, said TT Srinivasaraghavan, MD, SF.