Strategic Sale of Satyam Computers

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Case Details:

Case Code : BSTR337
Case Length : 20 Pages
Period : 2008-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Satyam Computer Services Limited, Tech Mahindra Limited
Industry : Information Technology / Software Services
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"There is a palpable sense that Satyam is going to be a viable and strong entity. This is based on the personal communications I have been receiving and my interactions. Satyam is not a sinking ship, though it is not a racing craft yet."¹

- Anand Mahindra, Vice-chairman and Managing Director, Mahindra Group and Chairman, Tech Mahindra in 2009.

"The Board and the Indian government worked together to induct a strategic investor in record time. I am pleased to learn that Tech Mahindra is eager to maintain that pace. They've lost no time in moving onto next steps."²

- Kiran Karnik, Chairman of the Government Appointed Board at Satyam, in April 2009.

"The concern several clients expressed to Forrester is about some of the bidders and Tech Mahindra's inclusion as it is not exactly present in the domain and the lines of services of Satyam like manufacturing, auto, aero, or in terms of life science services, enterprise applications, engineering services. So, clients would be concerned. If I am a manufacturing company who used to use Satyam for mechanical engineering design, now the company has been bought by a company, which is specializing into telecom."³

- Sudin Apte, Senior Analyst, Forrester Research⁴, in April 2009.

Resurrection of Satyam

On April 13, 2009, the government appointed board of India-based Satyam Computer Services Limited (Satyam)⁵ announced that Tech Mahindra Limited (Tech Mahindra), a joint venture between the India-based conglomerate Mahindra & Mahindra⁶ and the UK-based BT Plc⁷ had been chosen as the preferred bidder for the acquisition of the beleaguered Satyam.

Strategic Sale of Satyam Computers - Next Page>>

1] "Satyam to Stay in Hyderabad," http://timesofindia.com, April 21, 2009.
2] "Tech Mahindra and Satyam Discuss Transition," www.satyam.com, April 20, 2009.
3] "Tech Mahindra Bags Satyam: Samir Arora, Forrester React," www.moneycontrol.com, April 13, 2009.
4] US-based Forrester Research is a technology and market research company.
5] Satyam was the fourth largest software services exporter in India. For the year ending March 2008, it reported revenues of US$ 2.1 billion and net income of US$ 417 million.
6] Mahindra & Mahindra is among the top ten industrial houses in India. It has a presence the in automobile, farm equipment, information technology, financial services, engineering services, and infrastructure development sectors.
7] BT Group Plc. (formerly known as British Telecom) is the UK-based telecommunications operator. BT operated in more than 170 countries as of 2009. Its revenue was at £ 20,704 million and net income was at £ 1,738 million as of 2008.

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