The boards of Satyam Computer Services Ltd and Tech Mahindra Ltd, IT services providers part of the Mahindra group, will meet on Wednesday to consider a merger, the companies said on Tuesday in separate statements.
Billionaire Anand Mahindra purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based software services provider admitted to one of the largest accounting frauds in India.
Mahindra is seeking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra, which provide software services to clients mostly in the United States and Europe.
Satyam, now re-branded Mahindra Satyam, reported a better-than-expected fiscal third-quarter profit on February 1.
Satyam shares rose 4.7% to Rs 74.15 at close of Mumbai trading in a market that gained 0.25%. Tech Mahindra shares added 4.9% at Rs 648.7.
The two companies will also consider the amalgamation of some of their wholly-owned subsidiaries - Venturbay Consultants Private Ltd, C&S System Technologies Private Ltd, CanvasM Technologies Ltd and Mahindra Logisoft Business Solutions Ltd - the statements said.
