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News >> Technology >>
EDS may buy Citi stake in Polaris
By agencies
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Monday, 15 August 2005, 19:30 IST
BANGALORE:The $20.7 billion EDS (formerly Electronic Data Systems) is in discussions with the Citigroup to buy its entire 43.62 percent stake in Rs 7.87 billion Polaris Software Lab, a Chennai-based financial software services and products company.
EDS is serious about scaling up India offshoring facility through inorganic route. Its focus is on strengthening the portfolio.
If the deal goes through, EDS will have to make an open offer for 20 percent of the floating stock which could swell its holding to well over a majority stake. Polaris promoter Arun Jain owns 22.05 percent of the company. EDS would be interested in Polaris because unlike IBM and Accenture it doesn't have a large presence in India.
In India, EDS already has a strategic alliance with TCS to leverage its offshore resources. Recently, it chose Cognizant for application development and management. Citigroup, a large client, is likely to continue as a major client after buy-out. Polaris could continue as a stand-alone strategic business unit of EDS. Citi's venture capital investment shows there is a well-planned roadmap on exit. EDS, Accenture, Cap Gemini are all looking at inorganic growth.