Tech Mahindra, a Mahindra & Mahindra group company, is understood to have approached Satyam Computer Services, India’s fourth-largest IT services company, for a cashless merger, according to a person close to the development. If the transaction goes through, it will involve Tech Mahindra merging into Satyam, creating the third-largest IT company in the country.
The management control of the merged entity is believed to be in the hands of M&M. When contacted, a senior executive of M&M, which owns 44% in Tech Mahindra, said: “Anything that offers strategic value to Tech Mahindra would be of interest to the group.” However, the official refused to comment on whether specific talks had been initiated between the two companies.
Talks of a management change at Satyam have been doing the rounds since mid-December, following its botched attempt to take over two infrastructure companies owned by the family of Satyam’s founder Ramalinga Raju.
Potential suitors are said to include homegrown HCL Technologies, foreign companies such as HP as well as private equity funds, although so far none of these companies have confirmed their interest in Satyam.