The Hindu Business Line : TCS acquires 100% control in Brazilian venture

Mumbai May 26 Tata Consultancy Services (TCS) has gained complete control of the Brazil-based joint venture company `TCS do Brasil' by acquiring its partner Grupo TBA's 49 per cent stake for $33.4 million (Rs 137 crore).

In doing so, the Mumbai-based TCS's stake in the erstwhile joint venture has gone up to 100 per cent from 51 per cent, said a news release from the company.

"Brazil is an important market for TCS and this initiative will help us further strengthen our global network delivery model and enable us to scale up our operations quickly," said a TCS spokesperson.

In 2002, TCS had ventured into the high-growth Brazilian market by forming TCS do Brasil through a 51:49 joint venture with Grupo TBA. TCS do Brasil is an IT services company with delivery centres in the Brazilian cities of Sao Paulo and Brasilia. It provides services to over 30 clients including ABN Amro, Goodyear, Equifax and Brasil Telecom.

For the year ended March 31, 2007, TCS do Brasil recorded revenues of $ 66.5 million (Rs 272.65 crore) and employed over 1,700 persons.

Analysts believe that TCS now has a strong grip over the Brazilian market and has the potential to sail on its own. "Generally, Indian IT companies partner with local players in new geographies to ensure brand visibility and garner local expertise. However, after five years of association, the value of the partnership has run its course," said Mr Harit Shah, Research Analyst, Angel Broking.

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