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Abstract

This is part of a case series. This case primarily deals with the bidding process to sell a 51% stake of Satyam. It helps in understanding the factors leading to Satyam's corporate governance fiasco and the series of events that resulted in selling off Satyam. The case also helps in analysing the potential synergies between Satyam and Tech Mahindra, the winner of the bid. Further, this case also helps in assessing the challenges that Tech Mahindra would face in realising the expected benefits of the acquisition. The government appointed board, on taking over at Satyam, called for a six-stage bidding process to transfer the ownership of the company. Three suitors qualified for the final stage of the bidding process, of which Tech Mahindra won the deal with an offer of 58 rupees per share, compared to 45.90 rupees and 20 rupees from L&T and Wilbur Ross respectively. Certain sections of the media stated that Tech Mahindra had overvalued Satyam. However, the management of Tech Mahindra maintained that Satyam was worth its bid. Surely, Tech Mahindra has a lot of benefits from taking over Satyam. For starters, Satyam will get Tech Mahindra closer to Fortune 500 clients, will help in the diversification of its IT business, will make it one of the big four IT companies of India and will multiply its revenue manifold. But having the potential synergies and realising the same are two different parts of the equation, but are mutually inclusive.
Location:
Other setting(s):
2009

About

Abstract

This is part of a case series. This case primarily deals with the bidding process to sell a 51% stake of Satyam. It helps in understanding the factors leading to Satyam's corporate governance fiasco and the series of events that resulted in selling off Satyam. The case also helps in analysing the potential synergies between Satyam and Tech Mahindra, the winner of the bid. Further, this case also helps in assessing the challenges that Tech Mahindra would face in realising the expected benefits of the acquisition. The government appointed board, on taking over at Satyam, called for a six-stage bidding process to transfer the ownership of the company. Three suitors qualified for the final stage of the bidding process, of which Tech Mahindra won the deal with an offer of 58 rupees per share, compared to 45.90 rupees and 20 rupees from L&T and Wilbur Ross respectively. Certain sections of the media stated that Tech Mahindra had overvalued Satyam. However, the management of Tech Mahindra maintained that Satyam was worth its bid. Surely, Tech Mahindra has a lot of benefits from taking over Satyam. For starters, Satyam will get Tech Mahindra closer to Fortune 500 clients, will help in the diversification of its IT business, will make it one of the big four IT companies of India and will multiply its revenue manifold. But having the potential synergies and realising the same are two different parts of the equation, but are mutually inclusive.

Settings

Location:
Other setting(s):
2009

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