Increasing its stake in an IT outsourcer, Citigroup
on Monday said
will buy out India’s e-Serve International for about $126 million.
The New York financial services giant already owns a 44 percent stake in the
firm. Founded in 1992, e-Serve is one of the five largest Indian outsourcing firms and has more than 5,000 employees. Citigroup is its sole customer.
“This transaction will bring e-Serve’s services in-house and we’ll integrate e-Serve into our global services support platform,” Leah Johnson, a Citigroup spokeswoman told internetnews.com.
Johnson said no U.S. jobs will be lost as a result of the purchase. Citigroup has had a presence in India for 100 years and is the leading credit card issuer in India, Johnson said.
“It makes sense in the context of our business in India and the support e-Serve already supplies to our buisness to seek full ownership,” she added.
e-Serve processes more than 100 million transactions and its call centers
manage more than 20 million customer inquiries for Citigroup’s African,
European, North American and South Asian banking, insurance and investment
e-Serve is publicly traded in India and will have to be taken off that stock
market if its minority shareholders accept Citigroup’s buyout offer.
Citibank’s move comes just a week after IBM
call center operator Daksh e-services for an estimated $150 million to $200
That deal will extend the Big Blue’s position in the region, where it is
leveraging a local presence in the business outsourcing arena.
Also, the Indian IT outsourcing giant Infosys Technologies
last week said it is opening
a business consulting practice in the U.S.
The string of announcements is playing out during a U.S. presidential
election season in which both parties are positioning themselves as working
to keep high-paying jobs in the U.S. In Congress and in state
legislatures, several bills are pending that would penalize companies that
moved jobs offshore.
Meanwhile, U.S. software development firms are stressing quality and specialized skills to customers who are considering moving
work to lower-costs programmers in China, India and Russia.