Hindustan Unilever Ltd (HUL) today announced that it had sold its remaining 49 per cent stake in Capgemini Business Services (India) Ltd (formerly Unilever India Shared Services or UISSL) to Cap Gemini SA as part of an agreement signed in October 2006. However, the financial details of the transaction were not known.
In September 2006, Cap Gemini SA, the Paris-based IT services firm, acquired a 51 per cent stake in UISSL (Indigo), a provider of financial shared services and Sarbanes Oxley compliance services. Indigo was the in-house BPO unit of HUL. Post dilution, UISSL was renamed as Capgemini Business Services (India) Ltd (CGBSL). Both companies, under a separate agreement entered in October 2006, further agreed for dilution of the balance 49 per cent stake of HUL in favour of Cap Gemini SA by March 31, 2010. Cap Gemini SA and HUL also entered into a seven-year agreement to deliver the full range of BPO financial and administration services to the Unilever companies that were customers of Indigo.
“The purchase of HUL centres in India by Capgemini has proved to be very successful. In 2010, more than 3,400 employees in India provided BPO services from these centres to Unilever and other clients, and we plan to have 5,000 people at the end of 2010. This has gone up from 600 in 2006. These centres are today providing services to more than eight clients,” a spokesperson at Capgemini told Business Standard in an e-mail response.
NXP, Zurich Financial Services, Coca-Cola Enterprises, Torvald Klaveness Group, Dell, Stora Enso, Six Telekurs and Bombardier are the eight clients being served from these centres.
From an HUL perspective, analysts are of the opinion that the company is getting out of non-core business and this will allow it to unlock business value.
Analysts said the transaction was normal, as the exit option would have been mentioned in the contract earlier. “I do not think the size of the transaction will be large. Also, since this is a change in financial ownership, it need not necessarily mean that business will be impacted,” said Siddharth Pai, partner and managing director, TPI India.
Besides, the acquisition also helped the company to develop a variety of services. In addition to F&A, the centres cover management assurance services (Sox compliance), supply chain management, master data management and command centre. “This strategy is broadly executed in other countries such as in Latin America, which enabled Capgemini to expand the geographic spread of its services,” said the spokesperson.
Over a period of time, India has become central to Cap Gemini’s growth strategy. Today, Cap Gemini has over 26,000 employees in India, making it one of the largest centres for the company.
