Tata Consultancy Services (TCS), the country's largest IT services exporter, has signed a deal to merge its Japanese unit with Mitsubishi Corp's IT arm, the company said on Monday.
TCS will hold 51% of the merged company – TCS Japan – while Mitsubishi Corp will own the remainning 49%.
The new entity will be operational from July 2014. It will have over $600 million in revenue in a year and over 2,400 employees during the same period.
TCS paid for the merger using both equity and and $50 million cash transaction.
The transaction values the combined entity estimated at $300 million, subject to certain purchase price and closing adjustments, TCS said in a statement.
“TCS will now have the scale, strong local presence and our full range of global capabilities to serve the Japanese corporations effectively and accelerate our growth in Japan market,” N Chandrasekaran, TCS's CEO and Managing Director, said.
“We deeply value the partnership with Mitsubishi Corporation and look forward to leveraging our mutual strengths in the Japan market,” he added.
TCS shares touched a high of Rs 1, 790, up 1.14%, during intra day trade on the BSE on Monday. They were trading at Rs 1, 774.80 at 2 pm.