Ciba-Geigy Ups Stake In Indian Affiliate

Ciba-Geigy is raising its stake in its Indian affiliate, Hindustan Ciba-Geigy, from 40% to 51% by taking up shares on the open market and negotiating deals with institutional investors. Local sources note that this is probably the first time that a foreign company has increased its stake in an affiliate through the open market. Ciba-Geigy is said to be keen to avoid as far as possible the traditional route of preferential allotment of shares or open offer.

Ciba-Geigy has already acquired around 50,000 shares (face value 100 rupees), accounting for nearly 2% of the firm's 265 million rupees ($7.2 million). The Hindustan Ciba-Geigy scrip is quoted at about 2,775 rupees. The Foreign Investment Promotion Board has given approval for Ciba-Geigy to raise its stake.