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Flextronics to buy Hughes Soft
By siliconindia staff writer
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Tuesday, 08 June 2004, 19:30 IST
MUMBAI: Singapore-based Flextronics said on Tuesday it would pay $308 million to buy a 55 per cent stake of Indian software services firm Hughes Software Systems and 20 percent more through an open offer.
Flextronics, the world's largest contract manufacturer, will pay Rs 547 per share to buy 55 percent from DirecTV Group Inc.'s Hughes Network Systems, which is 34-per cent controlled by News Corp.'s Fox Entertainment Group .
Flextronics said in a statement it was required by Indian regulations to make an open offer for an additional 20 percent stake at a price not less than Rs 547 per share, costing at least $82 million on top of the $226 million purchase from DirecTV. The open offer will be made around June 11.
Hughes Software's shares were up 2.1 per cent at Rs 530.95 on the Bombay Stock Exchange after the news.
The Indian firm, a supplier of software for the telecoms sector, had revenue of Rs 3.6 billion in the year to March 2004, and was expected to grow 25 per cent in the current year, the statement said.
Flextronics is a contract manufacturer of equipment for companies such as Sony-Ericsson , Hewlett-Packard , Siemens and others.
"HSS will enable us to move quickly into the telecom infrastructure space," Michael Marks, chief executive of Flextronics said in the statement.