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Blackstone Buys Majority Stake in Indian Clothes Exporter

U.S. private equity investor Blackstonehas agreed to pay up to $165 million to buy a majority stake in India's leading garment exporter, Gokaldas Exports, both companies have said.

The New York-based company has reached an agreement to acquire a 50.1% stake in Gokaldas Exports and later make an open offer for an additional 20 percent as required by Indian laws, the companies said in a joint statement released late Monday.

Blackstone will invest up to $165 million (122 million euros) to complete the transaction, including the open offer, it said.

The news lifted shares of Gokaldas Exports by 11.4% to 255 rupees in early trading on the Bombay Stock Exchange Tuesday.

Garment exporters in India have seen their sales and profits surge in recent years following a reduction in import curbs in the European Union and have become attractive investment targets for private equity firms.

This is the third major deal for Blackstone in India this year. Earlier it acquired stakes in a media company in southern India and an outsourcing company set up by Britain's Barclays group.

In the deal announced Monday, the founder promoters of Gokaldas Exports will continue to lead the management of the company while Blackstone will have representation on the board of directors.

Bangalore-based Gokaldas Exports employs 47,000 people at 46 factories that make customized garments for leading U.S. and European brands.

Gokaldas' chairman, Rajendra Hinduja, said the company's customer profile is likely to get a boost from its partnership with Blackstone

"With its global reach and deep relationships, Blackstone is an ideal partner to help us realize our vision of building a global industry leader," the statement quoted Hinduja as saying.