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TCS signs agreement to merge its Japanese unit with Mitsubishi Corp’s IT arm

Management?s outlook on demand and expectation of stronger growth in FY15 remain intact

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.

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First published on: 21-04-2014 at 20:52 IST
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