TCS to acquire Citigroup Global Services for $505 million
October 10, 2008: Tata Consultancy Services (TCS) , a leading IT services, business solutions and outsourcing firm, and Citigroup Inc. (Citi), a leading global financial services company, today announced that they have reached an agreement for TCS to acquire all of Citi's interest in Citigroup Global Services Limited (CGSL), the India-based captive business processing outsourcing (BPO) arm of Citi for all cash consideration of approximately $505 million, subject to closing adjustments.
In addition to the sale, Citi has signed an agreement for TCS to provide, through CGSL, process outsourcing services to Citi and its affiliates in an aggregate amount of US$2.5 billion over a period of 9.5 years. The agreement builds upon the existing relationship between Citi and TCS whereby TCS provides application development, infrastructure support, help desk and other process outsourcing services to Citi.
The acquisition broadens TCS's portfolio of end-to-end IT and BPO services in the global Banking and Financial Services (BFS) sector. TCS's enhanced scale and expertise will provide service improvements to Citi and Citi's customers.
CGSL is one of the largest providers of business processing outsourcing services within the Banking and Financial Services sector, providing end-to- end process management across the BFS spectrum and a broad array of services to Citi's consumer, corporate and global wealth management businesses world wide. CGSL has more than 12,000 employees located in India and expects to generate revenues of approximately $278 million in 2008.
The acquisition of CGSL has two immediate strategic benefits for TCS. It gives it the ability to offer a comprehensive end-to-end, domain-led solution for business operations of large financial services institutions. It also positions it well to create banking processing platforms by integrating it's products and process capabilities.
TCS has provided IT services to Citi since 1992 and is currently one of the largest IT services partners for Citi, delivering IT and business processing outsourcing services to Citi across its operations in North America, Europe, India, Japan, Singapore and the rest of Asia Pacific.
The parties expect to close the transaction in the fourth quarter of 2008. Merrill Lynch acted as advisors to TCS in this transaction.
(This is press release of TCS)
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