For an all cash consideration of $127 million
Citi has completed the sale of Citi Technology Services, the India-based captive provider of information technology services to Citi entities worldwide, to Wipro Technologies, for an all cash consideration of $127 million.
Earlier it was decided that Indian IT services provider Wipro Technologies would acquire Citigroup’s arm, Citi Technology Services, for an all-cash offer of $127 million. The acquisition was expected to be closed in March 2009.
At the crucial decision making stage, Soumitro Ghosh, senior vice president for Finance Solutions at Wipro, said: Citi Technology Services team’s expertise in addressing the risk and compliance issues for banking industry positions us well to offer similar scale and complexity of services to other leading banks in the U.S. and Europe. We are confident that the skillsets we have acquired will enhance our capabilities to compete for more TIS business in the financial services industry in general and Citi in particular.
As part of the transaction, Wipro and Citi have signed a master services agreement for the delivery of technology infrastructure services and application development and maintenance services for a period of six years.
The agreement provides for the delivery of at least $500 million in service revenues over the period of the contract.
The transaction is consistent with Citi’s efforts to improve operating leverage while the company focuses on its core banking competencies. Further, it will reduce Citi’s total headcount by approximately 1,700 employees, all of whom are located in India.