Fitch Investors Service LP said Thursday that it would sell to IBCA Ltd. of London for $175 million in cash.

The New York-based company, which had carved a niche rating public finance issues and asset-backed securities, plans to merge with Europe's leading agency for bank and sovereign ratings.

For debt issuers, it means they may have to deal with another agency issuing unsolicited ratings, as Fitch officials say they will adopt their acquirer's more aggressive posture after the merger.

Stephen W. Joynt, president and chief operating officer at Fitch, said the different specialities of the two agencies made the merger a complementary fit.

"Both companies saw the possibilities of combining into a more powerful company than either would be alone," said Mr. Joynt, who will retain his position at the newly christened Fitch IBCA Inc.

The combined company's international scope means Fitch will compete in the banking sector against Thomson BankWatch, which is owned by the same parent as American Banker.

Fitch is the third-largest ratings agency in the country, trailing Moody's Investors Service and Standard & Poor's. Last year's revenues at Fitch were $65 million. IBCA, which is owned by a private French concern, Fimalac SA, reportedly had revenues of $22 million.

To build market share, Mr. Joynt said Fitch IBCA would issue ratings on debt and other securities without an invitation to examine the issuer's books. Moody's has done this for years, to the displeasure of some businesses and municipalities.

"IBCA has issued unsolicited ratings when there is sufficient market information," Mr. Joynt said. "Where it is practical and where we think there is value for the investor, then we will consider it."

Fitch, founded in 1912, has grown markedly in recent years. In 1989 revenues totaled only $3 million.

The company grew after the Van Kampen Group of Grand Haven, Mich., bought a 58% stake in agency in 1989. Fitch then grew primarily by rating private placements and new, complex kinds of asset-backed securities.

But despite its capital infusion, Fitch, which opened a London office in 1995 and established "strategic partnerships" with ratings agencies in Israel, Mexico, and Thailand, lacked the money to build its international business as much as executives wanted, former employees say. These employees also say questions about Robert Van Kampen's health may have also spurred a sale. In August Fitch announced that it was negotiating with IBCA.

Fimalac's chairman, Marc Ladreit de Lacharriere, will assume chairmanship of Fitch IBCA. IBCA's current chairman, Robin Monro-Davies, will be vice chairman and chief executive of the merged entity.

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