Tata Consultancy Service, India’s top software services exporter is all set to buy the back office unit of Citigroup in India. The backend operation which employs nearly 12,000 people and provides support to the global business of Citi is being bought for $505 million in cash.
TCS has also signed a $2.5 billion dollar contract with Citi to provide backend support to all of Citi’s businesses for the next nine and a half years.
The exercise has been part of Citi’s global efforts to bring down costs and raise funds to survive the economic downturn that the world is facing today.
TCS expects that the revenues from the deal will start flowing in, in the fiscal fourth quarter ending March 2009. The deal will help TCS acquire expertise in the banking domain and is likely to result in more such deals taking place in the industry in the future.