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The deal is expected to close in the first half of 2006 and is subject to various regulatory approvals

Mumbai , Dec. 8

GLOBAL investment bank Merrill Lynch has announced it will hike its stake in Indian arm DSP Merrill Lynch to 90 per cent by acquiring an additional 50 per cent stake from its partner, Mr Hemendra Kothari, in a deal worth about $500 million.

The move, which is expected to see more aggressive expansion by Merrill Lynch in India, will also see the company getting delisted from the Bombay Stock Exchange after buying out the remaining stakes held by the Indian public, NRIs and private corporate bodies through an open offer.

The DSP ML share hit a 52-week high of Rs 2,170 on the BSE on Thursday, following the announcement.

Mr Kothari will continue as Chairman of DSP Merrill Lynch, and will take on added responsibility as a Vice-Chairman of Merrill Lynch International supporting Merrill Lynch's growth plans internationally and assisting Indian companies in their global endeavours, according to a Merrill Lynch release here on Thursday.

Merrill Lynch's relationship with DSP began in 1987 and grew into a joint venture in 1995.

The business will continue to operate under the DSP Merrill Lynch name.

Mr Stan O'Neal, Chairman and CEO of Merrill Lynch, said: "As a result of this change, we will be able to accelerate our plans for growth in this robust market."

The deal is expected to close in the first half of 2006 and is subject to various regulatory approvals, including the Foreign Investment Promotion Board and the Reserve Bank of India.

The increased ownership by Merrill Lynch will enable the firm to continue to build its presence as one of the leading securities firms in India, the release said.

As per the transaction, DSPML Fund Managers, a wholly owned asset management subsidiary of DSPML, has agreed to divest 60 per cent stake in the venture to Mr Kothari and related entities. DSPML will own 40 per cent in the asset management subsidiary.

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