MphasiS to buy AIG’s India arm1 min read . Updated: 13 Aug 2009, 12:13 AM IST
MphasiS to buy AIG’s India arm
Bangalore: Indian software services firm MphasiS Ltd said on Wednesday it would buy the India-based information technology (IT) services and solutions arm of American International Group Inc. (AIG), as the bailed out US insurer looks to sell some units.
Financial details of the deal were not disclosed.
AIG Systems Solutions Pvt. Ltd, which provides IT services to AIG companies worldwide, has at least 800 employees at its facilities in Chennai and Kolkata, MphasiS said in a statement.
Shares in MphasiS, majority owned by Electronic Data Systems Corp., a unit of Hewlett-Packard Co., rose as much as 4.3% after the news in the weak main Mumbai market.
The shares, however, gave up its gains later in the day on profit taking to close flat at Rs500.45, while the Bombay Stock Exchange’s benchmark Sensex index closed 0.36% down at 15,020.16. MphasiS, which gets at least 39% of its revenue from its financial services and insurance industry clients, will be able to boost its offerings for the insurance sector with this acquisition, said a company statement.
AIG Systems offers services such as application development and maintenance, testing, product development and support, the statement said.
Indian outsourcing companies have been buying local IT services units of the global financial giants, who are reeling under the impact of the financial meltdown, to boost their service offerings and acquire new customers. In December, Wipro Ltd, India’s third-ranked IT services firm, announced the acquisition of Citi Technology Services Ltd for $127 million (Rs614.7 crore), as the embattled Citigroup looked to shed assets outside its core business.
AIG, once the world’s largest insurer, is also winding down some units and selling others to cut risky investments and raise cash to repay $80 billion in taxpayer loans.