Bear Stearsn negotiating to acquire Ford Credit's Ford Automative FInance in India
Our Corporate Bureau
16 August 2007
Mumbai: US financial services group Bear Stearns & Co. Inc. plans to secure an additional license in India with the acquisition of US automaker Ford's financial arm Ford Automotive Finance Company, from its parent Ford Credit International. This acquisition will strengthen its non-banking financial company (NBFC) operations in the country.
A spokesman for the US firm in London confirmed the negotiations with Ford, without confirming the acquisition price, reported by the media to be between $20 and $25 million.
It is already registered as an FII in India and offers services such as buying Indian equity for overseas clients, though it cannot sell other products into the market.
After the acquisition, it plans to offer a full range of services covering institutional equities, fixed income, investment banking, global clearing services, asset management, private client services and other services allowed for a non-banking financial company (NBFC) in India.
Because India currently does not issue new licenses to sell financial products into the country, Bear Sterns has been forced to adopt the secondary market route through an acquisition.
According to data from SEBI, there are about 1,050 registered FIIs who have been issued licences to operate in India, with 32 asset management firms managing over 4 trillion rupees ($99 billion).
Bear Stearns, which had revenues of $16.5 billion with total assets of $350 billion as of November 2006, was in the news last month when two of its hedge funds filed for bankruptcy in the US due to high exposures in the US sub-prime home mortgage market.