Indian carmaker Mahindra & Mahindra has agreed to buy a 5.5% interest in its software unit Tech Mahindra from UK incumbent BT.
In a statement to the Bombay Stock Exchange, the company explained that it will buy the interest over time at a market-related…
Indian carmaker Mahindra & Mahindra has agreed to buy a 5.5% interest in its software unit Tech Mahindra from UK incumbent BT.
In a statement to the Bombay Stock Exchange, the company explained that it will buy the interest over time at a market-related price in accordance with Indian rules.
Based on Tech Mahindra’s current market price, the stake is worth about £61m. But a spokesman for BT declined to disclose the agreed price.
The company used in-house advisers for the sale. According to previous reports, BT had also hired Credit Suisse on the deal.
In a statement, BT, which currently has a 29.9% stake in Tech Mahindra, said: “Tech Mahindra will continue to be a key strategic supplier of BT and while further sales may be considered in the future, BT expects to continue to have a shareholding in Tech Mahindra for some time.”
The British company has been looking to sell part of its stake for quite some time now, as it struggles with a £9bn pension deficit, according to the Wall Street Journal.
Mahindra & Mahindra, which owns 43% of Tech Mahindra, also said in the statement that it agreed to grant BT a waiver of its pre-emption rights for BT’s remaining shareholding in Tech Mahindra, subject to certain conditions.
According to experts in the industry, BT may eventually sell its entire stake, depending on the buyer’s appetite.
Mahindra could not be reached for comment before going to press.
