Shares in energy major Reliance Industries rose to one-month highs on Monday as traders said its offer for bankrupt petrochemicals company LyondellBasell Industries was well timed and would help its core businesses.

Over the weekend India's Reliance said it had made a cash offer to buy control of LyondellBasell.

A deal would create one of the largest petrochemical firms in the world, and comes when valuations are still low following the global downturn and Reliance is cashed up, analysts said.

Sources have put the value of the deal at around $10 billion to $12 billion, which would be India's second-biggest ever foreign takeover. In 2007, Tata Steel bought Corus for $13 billion.

However, the deal differs from other big overseas deals given the relative size of companies, balance sheet strength and bankruptcy status of the LyondellBasell, Goldman Sachs said in a research report.

"We have been noting that Reliance could pursue inorganic growth as we see no major projects lined up to consume about US$20 billion of excess cash flow for FY2011 to FY2014 after its committed capex," Goldman Sachs said.

It would also mark a return of Indian firms to large-scale M&A, after the global credit crunch and economic downturn made it difficult for firms such as aluminium maker Hindalco and Tata Motors, which bought Jaguar Land Rover, to digest big deals made in 2007 and early 2008.

At 0625 GMT, Reliance, which has a 14 percent weighting in the main Mumbai index, was up 3.1 percent at 2,191 rupees. The main index gained 0.8 percent.

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