Wipro Will Increase Productivity Due To Acquisition Of Citigroup Technology Services

Wipro Technologies Ltd has reached an agreement to acquire Citigroup Technology Services Ltd. for $127 million. The latter, which is based in Mumbai and Chennai, provides IT services to Citigroup Inc. entities. It expects to generate about $80 million in

By None

Wipro Technologies Ltd has reached an agreement to acquire Citigroup Technology Services Ltd. for $127 million. The latter, which is based in Mumbai and Chennai, provides IT services to Citigroup Inc. entities. It expects to generate about $80 million in revenues in 2008.

As part of the agreement, Citi will award the Bangalore-based company a contract worth approximately $500 million over the next six years to provide it technology infrastructure and application-development services. The two companies expect to complete the deal in March.

Citigroup Inc., the New York-based parent of Citi Technology Services, has been hard-hit by the global credit crisis: The company’s market value plunged nearly 80% last year and it needed $20 billion in federal bailout funds in November to stay afloat and prevent the nation’s financial system from collapsing. Citi also received a separate $25 billion infusion of capital earlier in the year.

In an effort to stem the bleeding and raise funds, Citi launched an aggressive cost-cutting plan earlier this year that included mass layoffs and the sale of noncore assets.

Wipro Technologies co-chief executive officer Girish S. Paranjpe said the company will absorb the 1,650 employees at Citi Technology Services’ two Indian offices.

“Citi has played a pioneering role in leveraging technology for banking,” says Girish S. Paranjpe, co-chief executive officer, Wipro Technologies. “We are pleased that our domain expertise and infrastructure-management capabilities positioned us as their partner of choice.”

“This position has further strengthened with this strategic transaction. We are delighted to welcome the employees of Citi Technology Services into the Wipro family.”

“Wipro, with its wide range of services, extensive experience and broad global presence can play a significant role in meeting Citi’s objectives of productivity improvement, while our Citi Technology Services employees will join a larger information technology organization with additional third party growth opportunities.

“Citi Technology Services team’s expertise in addressing the risk and compliance issues for banking industry positions us well to offer similar scale and complexity of services to other leading banks in U.S. and Europe,” says Soumitro Ghosh, senior vice president of finance solutions, Wipro Technologies.

“We are confident that the skillsets we have acquired will enhance our capabilities to compete for more [technology-infrastructure-management] business in the financial services industry in general and Citi in particular.”

L.D.

«