Feeds

Tech Mahindra to swallow Satyam in BILLION dollar deal

Indian outsourcers can't get enough of each other

Gartner critical capabilities for enterprise endpoint backup

The wonderful world of outsourcing is about to get a little bit smaller after Indian tech giants Tech Mahindra and Mahindra Satyam announced their intention to merge, creating India’s fifth-largest IT and outsourcing group by revenues.

In reality it is Tech Mahindra in the driving seat, as the outsourcing giant bought a controlling stake in Satyam in 2009 after the firm became embroiled in one of India’s biggest ever corporate scandals.

The $1bn (£630m) merger will give birth to a company with revenues of around $2.4bn (£1.5bn), a workforce of approximately 75,000 and over 350 clients across 54 countries, according to the firms.

However, Ovum analyst Ed Thomas warned that the saga is far from over.

“It will take the rest of the year for the merger process to be concluded and no name for the combined entity has yet been announced,” he said.

“On this latter point, it will be interesting to see if the Mahindra Group, which will own over one quarter of the new operation, decides to finally rid itself of the Satyam brand, which was badly tarnished by the accounting scandal that came to light in 2008.”

That scandal emerged when Satyam founder B Ramalinga Raju admitted he had been inflating profits at the firm by almost a billion pounds over several years.

The government was ultimately forced to step in and the company was offloaded to rival Tech Mahindra.

BT of course owns about a quarter of Tech Mahindra as it founded the firm in the mid 80s as a joint venture, so will get its mitts on 12.8 per cent of the new entity.

Unsurprisingly gushing statements from both sides of the table pointed to an “important new chapter” in the history of both firms.

"This merger will help propel the combined entity into the top tier of Indian software and services companies, achieving the [Mahindra] Group's key objective of being in a leadership role in each of our focus business areas," said Tech Mahindra chairman Anand Mahindra. ®

The essential guide to IT transformation

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.