Mumbai, India-based Tata Consultancy Services (TCS), an IT services, business solutions and outsourcing firm, will acquire all of Citigroup's (New York) interest in Citigroup Global Services Limited (CGSL), the India-based captive business processing outsourcing (BPO) arm of Citi in an all-cash deal of approximately $505 million.
In addition, Citi has signed an agreement for TCS to provide, through CGSL, process outsourcing services to Citi and its affiliates in an aggregate amount of $2.5 billion over a period of 9.5 years. The agreement builds upon an 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.
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.