The United Kingdom-based Financial Times has formally signed an agreement with Business Standard to take a 13.85 per cent equity stake in the newspaper which claims to be India's second largest financial newspaper.
FT has paid Rs 14.1 crore (Rs 141 million) for the stake.
The investment is the first major one in an Indian newspaper by a foreign media investor since media investment rules were liberalised during the Atal Bihari Vajpayee government's regime. The new investment rules allow for 26 per cent foreign direct investment in news media, while 74 per cent of FDI is allowed in technical publications.
FT's intention to purchase a stake in Business Standard was first announced in September 2003. In December 2003, Business Standard applied for permission to the government to let FT invest in it. It got the green signal from the government in April this year.
FT and Business Standard have, however, been in an informal partnership for nearly 11 years now.
"It has taken us a long time to come to this point. It's a partnership that has withstood the test of time. We picked up 14 per cent as we wanted to move steadily," says David Bell, Chairman, Financial Times Group.
The stake will earn the FT a seat on the 8-member board of Business Standard.
Other investors in Business Standard include Kotak Mahindra Group, which holds about 54 per cent, and Great Eastern Shipping which has around 28 per cent stake.
Business Standard has a circulation of nearly 70,000 copies and is published from seven centers in India.
FT and Business Standard have also entered into a content partnership agreement.
From June 22, 2004, all editions of Business Standard will carry a dedicated page of FT content, which will also appear on Business Standard's Web site.
In turn, FT will carry some of Business Standard articles on its Web site and is open to working out ways in which Business Standard's articles can appear in the FT.
"We have signed a licensing and syndication agreement with the FT for content," says T N Ninan, editor and publisher of Business Standard, while refusing to elaborate on the financial details of such an agreement.
This is FT's first investment in a newspaper in Asia. However, across the world, it has invested in media properties in countries like Spain, Russia, Germany and South Africa.
