Financial Daily from THE HINDU group of publications
Monday, Oct 27, 2003
Financial Daily from THE HINDU group of publications Monday, Oct 27, 2003 |
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Info-Tech
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Mergers & Acquisitions TCS bids for IT arm of SAS Group Raja Simhan T.E.
Chennai , Oct. 26 TATA Consultancy Services has bid to buy Scandinavian IT-Group A/S, the information technology subsidiary of $4.8 billion Scandinavian Airlines System. The $200 million SIG is one of Scandinavia's largest IT companies, employing over 1,200 people in Denmark, Sweden and Norway. When asked, TCS declined to comment on the bid. However, Mr Ragnar Norddahl, representative for the Tatas in Denmark, confirmed making the bid to Berlingske Tidende, a major Danish daily. "Yes, we have made a bid for SIG. The assignment is within our field of expertise. We are interested in establishing ourselves massively in Scandinavia; we have local consultants working for us. This has already been done in the US, South America, UK and Hungary," the official told the paper. Other bidders for SIG include IBM and AP Moeller-Maersk AS' Maersk Data, according to the newspaper. "The sale price of SIG is expected to be over one billion Kroner (about 135 million Euros)," the paper said. If TCS succeeds in buying SIG, it would be its second major acquisition in the airline sector this year. In May, TCS acquired Airline Financial Support Services (I) Pvt. Ltd. (AFS), a business process outsourcing company catering to the airline and hospitality industries. Formed in 1992, Airline Financial was a joint venture of Swissair (holding 75.1 per cent) and Tata Sons Ltd (24.9 per cent) as a captive BPO arm of the airline to perform revenue accounting services. On SIG sale, SAS Group recently decided to call for bids and enter into negotiations with potential acquirers of the IT arm. If attractive opportunities for a sale of SIG are identified, SAS Group management will present a recommendation to the board for a final decision before year-end, says information available in SIG's Web site. Market investigation will give SAS the opportunity to follow others in the airline industry including British Airways, Finnair, Japan Airlines, Air Canada, KLM, Delta and Continental. "SAS considers it important that SIG has an ownership structure that allows for continued development of SIG and its employees. This is not feasible within the current structure, as the trends in the market will lead to significant reductions in revenues and costs for SIG," the Web site says. With corporate headquarters in Stockholm, Sweden, SAS is the joint national airline of the three Scandinavian countries - Denmark, Sweden and Norway. SIG has installed and maintains 26,000 workstations. It monitors 235 local networks around the world and is responsible for the 4.3 billion annual transactions in Scandinavian Airlines global communications network. The group specialises in the development, maintenance, integration and operation of IT-solutions for the international airline industry, as well as for other service-oriented businesses. Other than the parent, customers of SIG include Lufthansa, Air Canada and Star Alliance, says the Web site.
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