Mahindra & Mahindra (M&M) on Friday said it would acquire an additional 5.5 per cent stake in its group company Tech Mahindra from British telecom giant BT Group Plc.
As per quarter ended September 30, BT Group holds 30 per cent stake in Tech Mahindra while M&M has 43 per cent holding in the company.
As per the current market price, 5.5 per cent stake of Tech Mahindra translates to Rs 433 crore.
“Pursuant to a proposal received from BT Group Plc, M&M has agreed to acquire upto 5.5 per cent of the equity share of Tech Mahindra from BT Group ‘over time’ through an inter-se transfer among qualifying promoters at a market related price,” M&M said in a statement on the Bombay Stock Exchange.
In a separate statement on the London Stock Exchange, BT said that Tech Mahindra will continue to be a key strategic supplier of the company while further sales may be considered in the future. The company expects to continue to have a shareholding in the company for some time.
M&M has also approved to grant BT a waiver of its pre-emption rights under the shareholders’ agreement between the two for the balance of the BT’s shareholding in Tech Mahindra, which M&M has not agreed to acquire, subject to certain conditions.
Further, M&M and BT have also agreed that as and when such balance shareholding of BT in Tech Mahindra falls below 10 per cent of Tech Mahindra’s issued share capital, the agreement between M&M, Tech Mahindra and BT would automatically terminate.
Tech Mahindra, developed from a joint venture between the two companies in 1986, has annual sales of more than USD 1 billion.
Mahindra, which is based in Pune, last year acquired Satyam Computer Services Ltd, the software developer embroiled in India’s biggest corporate fraud probe.