Jessica Mehroin Irani & George Smith Alexander
TATA Consultancy Services (TCS) is close to acquiring Citigroup’s captive BPO arm Citigroup Global Services (CGSL). Sources close to the development say that the deal is pegged at around $550 million and it will be announced within a fortnight. They said the deal would guarantee TCS to get business for CGSL from Citigroup for five years.
When contacted, both Citi and TCS declined to comment on the development. The spokesperson of TCS and Citi said in separate e-mails that they do not comment on market speculation.
ET had reported on August 19 that TCS was in talks with Citigroup to acquire CGSL. Citigroup has put it on the block as part of the restructuring of its back-end operations in India. IBM and Genpact are said to be the other bidders. Sources said that talks with Genpact fell through as it sought an exclusivity agreement which Citi turned down. IBM lost interest as there were certain riders which it did not like, sources said.
CGSL, which has over 6 lakh sq ft of combined offices in India, handles multiple operations for Citigroup entities globally. This includes cards, consumer finance, retail banking, capital markets & banking as well as global transaction services. It has more than 60 million customers in Asia, Europe, Africa and North America. It caters to operations in more than 40 countries and Citigroup is present in over 100 countries.
CGSL has its largest operations in Mumbai, Chennai and Gurgaon and employs around 12,000 people. If TCS takes over Citi’s BPO, it would add on to their already existing 8,000 strong back-office operations team which is mainly in India.
• The deal is pegged at around $550 million and it will be announced soon
• The deal would guarantee TCS to get business for CGSL from Citigroup for five years
• Citigroup has put it on the block as part of the restructuring of its back-end operations in India
• IBM and Genpact are said to be the other bidders