Mahindra to Acquire 5.5% Stake in Tech Mahindra `Over Time' From BT Group

Mahindra & Mahindra Ltd., India’s largest maker of sport-utility vehicles, said it agreed to buy a 5.5 percent stake in unit Tech Mahindra Ltd. from BT Group Plc.

Mahindra will buy the stake “over time” from the U.K.’s largest fixed-line phone company, according to a statement to the Bombay Stock Exchange today. The shares will be purchased at a market-related price in accordance with Indian rules, the Mumbai-based company said.

BT Chief Executive Officer Ian Livingston said in May the company was reviewing options for its 30 percent stake in the Indian software-services provider. The London-based company pared its holding in the venture following a share sale in 2006.

Tech Mahindra fell 2.5 percent to 608.05 rupees as of 10:54 a.m. in Mumbai trading. The stock has slumped 39 percent this year, while the benchmark Sensex index has climbed 9.1 percent. Mahindra shares declined 2.3 percent to 763 rupees.

Mahindra has a 43 percent stake in Tech Mahindra, according to Bloomberg data. The Pune, India-based company last year acquired control of Satyam Computer Services Ltd., the software developer embroiled in India’s biggest corporate fraud probe.

To contact the reporter on this story: Malavika Sharma in New Delhi at msharma52@bloomberg.net.

To contact the editor responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net.

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