VARBusiness 500 Firm Tata To Buy Citigroup Global Services

Proving that not every company has left the banking industry for dead, Tata Consultancy Services, VARBusiness 500 company No. 18, has agreed to buy Citigroup's interest in Citigroup Global Services Limited for approximately $505 million. CGSL is the India-based captive business processing outsourcing arm of Citi.

In addition, Tata Consultancy Services, or TCS, will provide through CGSL process outsourcing services to Citi and its affiliates for $2.5 billion during a nine-and-a-half-year period. That will add to the services TCS currently provides Citi: application development, infrastructure support, help desk and other process outsourcing services. For TCS, the deal will expand the solution provider's portfolio of end-to-end IT and business processing outsourcing services in the global banking and financial services sector. CGSL has more than 12,000 employees located in India and expects to generate revenue of approximately $278 million in 2008. For Citi, the arrangement aims to provide customers with service improvements.

"The acquisition of CGSL has two immediate strategic benefits for TCS. It gives us the ability to offer a comprehensive end-to-end, domain-led solution for business operations of large financial services institutions," N. Chandrasekaran, Tata's COO and executive director, said in a statement. "It also positions us well to create banking processing platforms by integrating our products and process capabilities."

TCS has provided IT services to Citi since 1992 and is one of the largest IT services partners for Citi across its operations in North America, Europe, India, Japan, Singapore and the rest of Asia-Pacific. The transaction is expected to be completed by the end of the year.