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Satyam, Tech Mahindra to consider merger Wednesday
March 20, 2012 / 12:06 PM / 6 years ago

Satyam, Tech Mahindra to consider merger Wednesday

A security guard stands outside the head office of Satyam Computer Services in Hyderabad January 7, 2009. REUTERS/Krishnendu Halder/Files

BANGALORE (Reuters) - The boards of Satyam Computer Services Ltd.(SATY.NS) and Tech Mahindra Ltd., IT services providers part of the Mahindra group, will meet on Wednesday to consider a merger, the companies said on Tuesday in separate statements.

Billionaire Anand Mahindra purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based software services provider admitted to one of the largest accounting frauds in India.

Mahindra is seeking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra, which provide software services to clients mostly in the United States and Europe.

Satyam, now re-branded Mahindra Satyam, reported a better-than-expected fiscal third-quarter profit on February 1.

Satyam shares rose 4.7 percent to 74.15 rupees at close of Mumbai trading in a market that gained 0.25 percent. Tech Mahindra shares added 4.9 percent at 648.7 rupees.

The two companies will also consider the amalgamation of some of their wholly-owned subsidiaries - Venturbay Consultants Private Ltd, C&S System Technologies Private Ltd, CanvasM Technologies Ltd and Mahindra Logisoft Business Solutions Ltd - the statements said.

Editing by Malini Menon

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