Is BT Divesting Stake in India's Tech Mahindra?

<body><p>Even as a very big outsourcing deal closed in the U.S., with HP <strong><a href="http://www.itbusinessedge.com/blogs/sts/?p=451">completing its $13.9 billion purchase of EDS</a></strong>, there came word of a possible smaller sale. British Telecom is reportedly considering <strong><a href="http://www.ft.com/cms/s/0/d12582ba-73ce-11dd-8a66-0000779fd18c.html?nclick_check=1">divesting some or all</a></strong> of its 31 percent ownership stake in India's Tech Mahindra, reports the <strong>Financial Times</strong>.<br/><br/>According to the article, BT has determined that the joint venture doesn't mesh with its long-term strategy. That's a common reason offered by companies that sell their ownership stakes in offshore service providers, along with <strong><a href="http://www.itbusinessedge.com/blogs/exb/?p=161">difficulties in controlling costs</a></strong>. The article cites General Electric and Aviva as companies that have completed such sales and Citigroup Global Services as a company <strong><a href="http://www.itbusinessedge.com/blogs/sts/?p=410">reportedly considering one</a></strong>.<br/><br/>The article offers few concrete details and cites unnamed sources "familiar with the situation." Such sources seem to think a private equity firm would be the most likely buyer. BT is tight-lipped, saying only that it regularly reviews its global investments.<br/><br/>Tech Mahindra is reportedly worth about $2.2 billion and has grown 30 percent a year over the past three years, to become India's sixth-largest software services company. Indian conglomerate Mahindra &amp; Mahindra owns the largest stake, about 41 percent. Some 65 percent of Tech Mahindra's annual revenues of $937.4 million come from BT.<br/><br/>In an interview with <strong>Moneycontrol</strong>, Tech Mahindra executive CP Gurnani insists <strong><a href="http://www.itbusinessedge.com/item/?ci=47307">no sale is planned</a></strong>.</p></body>