Finally, Satyam’s saga will end with the proposed merger with its parent company Tech Mahindra to form one of the top five IT companies in the country.
The announced merger will create a behemoth of $2.4 billion company, with more than than 75,000 employees serving about 350 clients in 54 countries.
“This would make us a company with an annual revenue of $2.4-billion approximately, with more than 75,000 workforce and over 350 active clients across 54 countries,” said Tech Mahindra Vice-Chairman and Managing Director Vineet Nayyar.
Nayyar is also the chairman of Mahindra Satyam. Speaking about the norms of the merger, Nayyar said share holders get one share of Tech Mahindra for 8.5 shares of Mahindra Satyam.
To be headquartered in Mumbai, the new company will erode the old Satyam’s stamp away from Hyderabad’s landscape where it reigned on top for over two decades. To be completed in nine months, the merger will be effected retrospectively from April 1, 2011.
Established in 1987 by its erstwhile defamed founder B. Ramalinga Raju, Satyam computer Services Limited emerged a leading global consulting and IT services company with clients in 55 countries.
In 1991 it went public and began serving its first major client Deere and Co, a Fortune 500 company. Soon, it diversified with sister concerns like Satyam Renaissance, Satyam Infoway, Satyam Spark Solutions and Satyam Enterprise Solutions. Its Infoway was the first Indian internet company to be listed on the NASDAQ and the merged entity will not effect delisting from the NASDAQ.
Ten years later, it began setting up overseas offices in Singapore, Dubai and Sydney. In 2005, it acquired a 100 percent stake in Singapore-based Knowledge Dynamix and 75 percent stake in London-based Citisoft Plc.
The major blow to its reputation came in January 2009 when its Chairman Ramalinga Raju resigned admitting his involvement in a massive accounting fraud. He was arrested and kept behind bars for over four years, pending the trial in a Hyderabad prison along with his brother Rama Raju, and the former C.F.O Vadlamani Srinivas. They were recently released on bail.
Following its collapse, in a government-mediated move, the Mahindra Group took over Satyam in June 2009, changed the name to “Mahindra Satyam”. The final merger will make it fifth largest IT company in India and 153rd among the Fortune India 500 companies.