Tata Consultancy Services (TCS) will acquire Phoenix Global Solutions India (PGS), the Bangalore-based software development and business process outsourcing (BPO) subsidiary of The Phoenix Companies.
TCS, India's largest software company, will get existing PGS business and its other clients, according to Atul Takle, vice-president of corporate communications at TCS.
Mumbai-based TCS already has some clients in the insurance sector, including American International Group.
Set up in 1996, primarily to service the in-house software development requirements of Phoenix, PGS has emerged as a supplier of software and services to other insurance companies.
With its 400 staff in Bangalore, the company provides insurance industry services, including IT, BPO and customer care.
PGS also provides transaction processing support to insurance companies, such as new business processing, policy administration support and distribution administration. It also has experience in customising and implementing technology products for the industry.
Meanwhile, IBM also announced in April that it would acquire Daksh eServices, a BPO company near Delhi, and earlier this year, Citigroup increased its stake from 44% to 100% in e-Serve International, a Mumbai-based BPO company which has Citigroup entities worldwide as its only clients. Citigroup owns equity in e-Serve through its subsidiary, Citibank Overseas Investment.
Even as some multinational companies are buying up local companies, others such as Phoenix are selling their operations in India to local companies.
General Electric, for example, is said to be negotiating the sale of some of its low-end BPO operations in India to local companies. When it becomes too expensive to do the work in-house at wholly owned Indian subsidiaries, multinationals decide to hive off the operation to an Indian company that will continue to provide the services to the multinational at a lower cost, according to analysts.
To the Indian company, buying the local operations of a foreign company gets it access to a large customer.
John Ribeiro writes for IDG News Service