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Tech Mahindra acquires Satyam for $578m

Posted on: Wed, 15 Apr 2009 05:06:00 EDT

Symbols: SAY, IBM, TMHAF

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Apr 15, 2009 (Datamonitor via COMTEX) --
TMHAF | Quote | Chart | News | PowerRating -- A Tech Mahindra subsidiary has acquired India-based IT services vendor Satyam Computer Services. It will initially acquire a 31% stake for INR 17.56 billion ($351m) at INR 58 ($1.16) per share, and will acquire an additional 20% through a public offer for the same share price. The two transactions will cost a total INR 28.9 billion ($578m).

Tech Mahindra will acquire land assets of around 425 acres in India, and a 48,000-strong workforce that it said will enable it to diversify its focus from the telecoms vertical to financial services, healthcare, manufacturing, and compete with TCS, Infosys, Wipro, IBM, and Accenture. It plans to run Satyam as an independent company.

Vineet Nayyar, chief executive at Tech Mahindra, said: "Satyam has immense experience and diversified geographical presence across different verticals. Satyam's and Tech Mahindra's profiles complement each other. After the company law board's decision, we will work with Satyam's customers, business partners, employees, and other stakeholders to restore confidence in the company and create a platform for growth."

Satyam received approval last month from market regulator Securities and Exchange Board of India to sell a 51% interest in the company in a global bidding process. The company's founder and chairman Ramalinga Raju resigned and was arrested in January after confessing to inflating profits for many years and falsifying assets. He is still in custody.

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