Tech Mahindra and Mahindra Satyam merge

Two of India’s biggest tech companies have announced that they will merge.

The marriage of Mahindra Satyam and its parent company Tech Mahindra will make the company the fifth largest software services exporter by market value in India.

It will also give it a helping hand in competing with bigger rivals such as Tata Consultancy Services and Infosys for large outsourcing contracts.

Following a board meeting that approved the merger, Tech Mahindra released a statement claiming the pairing would rake in around $2.4 billion and more than 350 clients across a range of different sector. And investors will also be quids in.

As part of the merger process, they’ll get one Tech Mahindra share for every 8.5 shares of Satyam.

However, Tech Mahindra may have to keep a close watch over its partner, which has been found cheating in the past.

Back in 2009 former chairman and founder Ramalinga Raju was found to be guilty of accountancy fraud as a result of overstating finances and falsifying assets.

Following a mass exit of staff and clients the company was taken under the wing of Tech Mahindra in April 2009 but was kept on as a separate arm of the company until the merger.