Grey negotiates to buy majority in Indian agency

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BOMBAY -- Grey Advertising is in negotiation with its Indian partners to raise its stake to majority control in Trikaya Grey Advertising, one of India's most creative ad agencies that ranks in the country's top 10.

Currently a 40% shareholder, Grey Advertising, New York, is in talks with Ravi Gupta and Sanjay Lalbhai, the two Indian partners who hold the rest of the equity in the Bombay-based shop. The shareholding sought isn't known. Trikaya recorded billings of $52m last year.

The acquisition is part of Grey's renewed focus on Asia, especially a market like India, where the ad industry growth rate is twice that of Europe. A decision is expected within months.

Grey's buyout plans synchronize with the existing trend in Indian advertising, where local partners have been bought out by multinational agencies.

India's six-year-old economic liberalization process has not only produced a spurt in ad spend, to about $1bn in 1995-96, but has also resulted in the increased involvement of multinational advertisers.

Multinationals currently account for 55% of the total ad spend in India and occupy almost all the top- ten advertiser positions.

Copyright February 1997, Crain Communications Inc.

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