NYSE Euronext to buy 5pct in MCX for $55mln

MUMBAI (Reuters) - NYSE Euronext, the parent of the New York Stock Exchange, has agreed to buy a 5 percent stake in India's largest commodity bourse for $55 million, aiming to diversify and get a slice of the commodities boom in India.

Financial Technologies India Ltd, which controls the Multi Commodity Exchange (MCX), and NYSE Euronext said in a joint statement on Friday they expect to complete the deal in the first half of 2008.

Interest in India's vibrant exchanges is the latest in the wave of consolidation attempts among bourses around the world as the volume of trade soars and operators seek global reach and greater economies of scale.

Catherine Kinney, president and co-chief operating officer of NYSE Euronext, said the investment was a part of the exchange's strategy to diversify its product portfolio and geographical reach.

It will be NYSE Euronext's second foray into India after buying a 5 percent stake in the National Stock Exchange, India's biggest stocks bourse, for $115 million last year.

MCX Chief Executive Jignesh Shah said Financial Technologies' stake in the bourse would fall to about 32 percent after the sale, while holdings of foreign direct investors would rise to 22 percent.

He said the money from the stake sale would be used to develop the market and related infrastructure such as warehouses.

In January, the government had allowed foreign companies, funds and exchanges to acquire up to 49 percent of a commodity bourse, but with single holdings capped at 5 percent.

Earlier, the government had allowed mutual fund giant Fidelity International to acquire 9 percent in MCX through its associate, Fid Fund (Mauritius) Ltd.