Tech Mahindra Ltd outbidding other competitors including L&T acquires Satyam Computer Services, which is presently facing charges of having committed the biggest corporate fraud
Tech Mahindra will be able to acquire control over the business serving Cisco Systems Inc. This would strengthen its position to compete with other major rivals such as Tata Consultancy and Infosys Technologies Ltd. The sale, after approval by the Indian Government would restore confidence of the investors in Satyam.
Other major engineering companies such as L&T, and private equity firm Ross & Co. as well as Cognizant Technology Solutions were major players in the race to acquire a stake in the beleaguered Satyam company. The winner was selected by the Satyam board, which has been appointed by the Government of India.
IBM was not a serious contender The takeover meeting was held at Mumbai. L&T was the most likely favorite, according to independent sources. L&T owns about 12.04 % stake in Satyam and has appointed Nomura and Citi Group as the investment bankers for a deal with Satyam.
Tech group, which is partly owned by BT Group Plc climbed by about 13% to 362 rupees by post lunch.
Tech Mahindra is controlled by the largest utility vehicle make in India, Mahindra & Mahindra Ltd., which had about 23,000 employees by the end of March 2008, less than half of Satyam’s workforce, which were around 50,000.
Tech Mahindra was advised by Kotak Mahindra Bank Ltd. UBS AG. Satyam, of course, appointed Goldman Sachs Group Inc.and Avendus Capital Pvt. Ltd. as the advisers for the sale.