GE sells 60 percent of its Indian BPO

GE sells 60 percent of its Indian BPO

By SiliconIndia   |   Monday, 08 November 2004, 08:00 Hrs
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NEW DELHI: U.S energy giant, GE, is selling its Indian outsourcing unit for $500 million to two U.S private equity investors—General Atlantic Partners and Oak Hill Capital Partners.

In the ongoing deal, GE will sell 60 percent stake to the investor duo and plans to keep the rest 40 percent in GECIS (GE Capital Services). This transaction is believed to beef up GEs growth and cut costs in terms of outsourcing the business processes to a third party.

Analysts have said GE could save money by outsourcing more of its operations instead of having a captive unit. GE was also one of the first few companies that had outsourced work to India, sensing the growing craziness of English language in the country coupled with cheap labor and best-suited geographical area.

Pramod Bhasin, who will remain GECIS president and chief executive officer, said GE's decision to “commercialize GECIS was driven by the opportunity to realize significant value.” The new deal will allow GECIS to cater to many other companies.

Bhasin said the new partners, who are buying equal stakes in GECIS, would help realize the Indian company's potential to "become a top global outsourcing company" and "unleash a new entrepreneurial spirit." At the same time, he said, "GE will continue to use and expand on the services GECIS provides it." GECIS provides support services to GE operations in North America, Europe, Asia and Australia.

The deal will be completed in six months and it is one of the largest deals in the country’s booming back-office industry.

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