Tech Mahindra, part of Indian business group Mahindra & Mahindra, won the race to acquire Satyam Computer Services on Monday, in a deal that’ll help the mid-sized outsourcer gain in size and also lift clarity on Satyam’s fate.
In a race that saw only a handful of bidders, Tech Mahindra beat rivals such as engineering conglomerate Larsen & Toubro and U.S.-listed Cognizant Technologies. Tech Mahindra agreed to buy a 31 percent stake in Satyam at 58 rupees, a 23 percent premium to Satyam’s last closing price.
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Tech Mahindra, established more than 20 years ago as a joint venture between Mahindra & Mahindra and British Telecom, faces the daunting task of reshaping Satyam, a company at the heart of India’s biggest corporate scandal.
Ever since Satyam’s founder Ramalinga Raju shocked markets by disclosing the $1 billion-plus fraud, there have been numerous reports of Satyam’s employees jumping ship and some clients cutting back on orders to Satyam. The company’s accounts are also still being restated and its U.S. liabilities are unclear.
Will the government continue to keep a close eye on Satyam? What’s going to be the fate of Satyam’s employees and clients? Will the Tech Mahindra-Satyam combination be able to grab market share from leaders Tata Consultancy, Infosys Technologies and Wipro? These are issues for which Tech Mahindra will need some answers pretty soon.
(Photo: Satyam Computer Services Chairman Kiran Karnik (2nd L) and board members Deepak Parekh (2nd R), Tarun Das (L) and T. N. Manoharan attend a news conference held by Satyam board members in Mumbai April 13, 2009. REUTERS/Arko Datta)
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6 comments so far
Some big hands would have been better for Satyam.
- Posted by arunthe industry and the govt have done a grest job by saveing company and thousands of jobs
- Posted by guru kaumarGreat news for Satyam!
- Posted by HarishI hope Tech Mahindra does not fire employees..
- Posted by RajThere is one Proverb in English - ” Ends Well All Well”. Might be it fit for Satyam but is it really done cause of Govt efforts i defer from this view. Well In fact Govt is some how support Mr. Raju and others to do such things which leads to a debacle, So finally who get the credit for this of course its IT industry and corporate who act with will to safeguard the interest of SATYAM IT industries and Indian corporate image. Its his will power that company not sold to L&T just on basis of merit of share holding but on merit of true vision and ability to handle the business. In true sense again our corporate prove that with true determination even corruptest system can be clean and make it on track to work.
- Posted by Amit DagaAnd the most admirable point which mention in one newspaper that still SATYAM web page gives you a company picture not like Lehman or Enron where u find only buried souls finding their way to salvation.
Even it is the good News for Tch Mahindra
- Posted by Rakesh Patil