Nov. 26 (Bloomberg) -- Mahindra & Mahindra Ltd., India’s largest maker of sport-utility vehicles, said it agreed to buy an additional 5.5 percent stake in software-services provider 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. Mahindra already has a 43 percent holding in Tech Mahindra, according to Bloomberg data.
Tech Mahindra, developed from a joint venture the two companies set up in 1986, has annual sales of more than $1 billion. BT Chief Executive Officer Ian Livingston said in May the company was reviewing options for its 30 percent stake in the Indian business. The London-based company pared its holding in the venture following a share sale in 2006.
BT said in a separate statement today that 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.”
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, based in Pune, last year acquired control of Satyam Computer Services Ltd., the software developer embroiled in India’s biggest corporate fraud probe.
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