India's Tech Mahindra Wins Satyam Bid

April 13, 2009
Sale price for majority share was $600 million

In a sale aimed at giving the scandal-hit outsourcing giant vital capital and a new beginning, India's Tech Mahindra won the bidding on April 13 for Satyam Computer Services.

The mid-level outsourcing firm will have to pay nearly $600 million for a majority share of Satyam, which has struggled since its founder earlier this year confessed to staging India's biggest accounting fraud.

Satyam said the news "signals a new stage for the company." The firm, which was India's fourth-largest outsourcer by revenues when the scandal broke, acts as back office for some of the world's biggest manufacturers, health care providers and banks.

The offer represents a 23% premium to Satyam's last closing share price and would mean Tech Mahindra would have to pay about 29 billion rupees (US$581.3 million) for a 51% stake. Tech Mahindra is majority owned by Mahindra and Mahindra, one of India's top 10 industrial houses, in partnership with British Telecommunications Plc.

Tech Mahindra has 23,000 employees, less than half Satyam's head count of 48,000 that includes contract workers.

In January, Satyam founder B. Ramalinga Raju admitted faking a billion-dollar bank balance and inflating the company's profits. Raju, his brother and seven other people, including two Price Waterhouse India auditors, are now being held on charges of conspiracy, cheating, forgery and falsification of accounts.

Copyright Agence France-Presse, 2009

Popular Sponsored Recommendations

Food and Beverage 2024 Trends and Outlook for North America

Oct. 29, 2023
Ready to hear what 200 of your peers said are the top challenges and opportunities in 2024? Don’t fall behind. Uncover actionable insights to better prepare for 2024 in this whitepaper...

Smarter Savings for Manufacturers - Guide

Sept. 11, 2023
Boost your manufacturing sales and revenue while reducing costs. Learn how one platform can help your business be more agile and productive in today's market.

The Manufacturer's Guide to Modernizing Commercial Operations

Sept. 12, 2023
In this guide, learn how a modern approach to commercial operations can help your manufacturing business integrate sales and revenue management to elevate seller productivity ...

Gain a competitive edge with real-world lessons on private 5G networks

Nov. 16, 2023
The use of private networks in manufacturing applications is rapidly growing. In this paper, we present valuable insights and lessons learned from the field with the goal of enhancing...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!