DHL, a German-backed global logistics company, will pay $125 million, or 350 rupees per share, for a 68.2 percent stake in South Asia's leading integrated air express carrier and make an open offer to the holders of the other 20 percent.

With 4,000 employees and a fleet of five Boeing 737 freighters, Blue Dart serves more than 220 countries and runs a network covering 13,700 locations in India.

Blue Dart already has a sales alliance with DHL, a unit of Deutsche Post.

"India is of strategic importance for us. It has tremendous growth opportunities," said Bryan Jamison, DHL's regional director, South East Asia & Indian Sub-Continent, told reporters in a news conference to announce the deal.

DHL's open offer, as mandated under Indian takeover laws, would be made at 350 rupees each. On successful completion of the offer, DHL's stake would go up to 88 percent.

Blue Dart shares jumped 5.6 percent to an all-time closing high of 320.25 rupees on the Bombay exchange, whose key index rose to an eight-month closing high.

Jamison said the combination of his division of DHL and Blue Dart would have turnover of about 10 billion rupees ($222 million) and would post strong double-digit revenue growth over the next five years.

"We believe Blue Dart's business would continue to grow at 20 percent. The domestic business is very much influenced by the economy and if the economy continues to grow well, the business continues to grow."

"We are no strangers to each other and the deal is a logical extension of our current partnership," said Jamison, with over 20-year experience with DHL.

This is DHL's first buyout in the Asia Pacific region and Jamison said he was not looking at more acquisitions in India, but India and China would continue to see increased investment.

"A quarter of our 1-billion-dollar investments over the past two years in Asia Pacific has come to India. And that reflects the importance of India," Jamison said.

Reuters had reported earlier in the day that DHL was set to buy a majority stake in Blue Dart at 350 rupees each.

At this stage, DHL has no plans to either merge Blue Dart with itself or delist it from the Indian bourses, Jamison said.

"The price we paid reflects the purchase of a strong brand and for (the purchase of) a premium provider in a strategic sector that we want to be in," Jamison said.

Shares in Blue Dart rose as much as 9.1 percent to a life high of 331 rupees on the Bombay exchange.

Among Blue Dart rivals, Gati Ltd. jumped 4.2 percent to 91 rupees and Elbee Services Ltd. leapt 5.3 percent to 6.93 rupees.

Blue Dart was set up with 30,000 rupees ($665) by Khushroo Dubash, Clyde Cooper and Tushar Jani in 1983 as Blue Dart Courier Services Ltd. The company went public in 1994.

"We wouldn't have sold if it hadn't been a fair price," Cooper told Reuters after the news conference.

While the founders are selling their entire 51.1 percent holding, Newfields Holdings Ltd. will sell 4.03 million shares to DHL of the 4.9 million it owns.

Blue Dart reported a net profit of 100.5 million rupees in the three months ended September, on net sales of 1.16 billion rupees. For the year ended March 2004, the company's net profit totalled 264.8 million rupees on net sales of 3.5 billion rupees.