EDS makes $380m offer for Indian BPO firm

Expect others to follow suit

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By Andy McCue, 6 April 2006 15:50

NEWS

EDS has made a $380m offer to buy a majority stake in an Indian business process outsourcing (BPO) company.

EDS has made the offer for a 52 per cent stake in Bangalore-based Mphasis, which has around 12,000 employees.

The US outsourcing giant said last month that it was looking at acquisitions in India, China, Korea and central Europe.

Mike Jordan, chairman and CEO of EDS, said in a statement: "This offer is complementary to our overall strategy to enhance EDS' presence and capabilities in India."

Mphasis was embroiled in a fraud scandal last year when three of its former Indian call centre workers were arrested for allegedly looting $350,000 from the accounts of Citibank customers in the US.

The EDS acquisition follows the lead set by IBM in 2004 when it paid an estimated £80m for Indian BPO firm Daksh.

Mark Kobayashi-Hillary, author of Outsourcing to India: The Offshoring Advantage said: "This is another step along the road of Indian IT companies being accepted in the mainstream IT industry."

He said the trend will continue and that it will be a "two-way" thing with India's top IT company TCS tipped to be the first to make an acquisition in Europe or the US.

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