Anand Mahindra, Chairman of Tech Mahindra, described the winning bid for Satyam as “historical and game changing for the company”. TechM would move into a different league in terms of revenue rate and full service capabilities, diversifying itself from a single vertical focus on telecom.
However, the company has the daunting task of integrating smoothly with fraud hit IT major. The companies challenges remain many: regain lost credibility in the eyes of clients who have moved away/moving away from satyam, retaining the key employees of Satyam, integrating 49,000 employees of Satyam with 24,000 of its employees.
Notwithstanding the challenges, Mahindra added that they will reach out to all the clients of Satyam including Cisco, General Motors (GM) and Citi. “I have spoken to John Chambers of Cisco and Vikram Pandit of Citigroup and have assured them of our support and backing for Satyam,” Mahindra said at a press conference in Mumbai.
He further added, “we have taken a calculated risk in making this bid. We have taken on a challenge and we will make it work.”
Vineet Nayyar, Vice Chairman and CEO Tech Mahindra, said that the acquisition will provide Tech Mahindra with a partner which is completely complementary. He also expressed his confidence in Satyam’s technical capabilities. He said that Satyam’s governance would be the main challenge for Tech Mahindra besides making Satyam financially viable and bringing it at par with the industry.
Tech Mahindra has confirmed that it is in a position to arrange for the necessary funds for the Satyam acquisition. While it has internal accruals of Rs 700 crore, it will raise debt at both SPV (Special Purpose Vehicle) as well as enterprise level. The company does not intend to pledge Satyam shares to raise funds in the future. Nayyar also said that the company has made a fair assessment of Satyam’s Upaid liabilities while evaluating it.
Though both Tech Mahindra and Satyam cater to a vast client base, there is no overlap in the clients of the two firms. The combined entity will have a client base of over 600.
9 years ago
The latest buzz in Satyam stake sale is that WL Ross & Co may be partnering...
5 years ago
Four years after acquiring a strategic stake in the auditing scam-tainted...
9 years ago
Tech Mahindra becomes the fourth largest IT firm with its successful bid for...