IBM shortlisted to buy Satyam

IBM has made the shortlist of companies interested in buying troubled Indian IT supplier Satyam, according to reports in India and the US.

IBM has made the shortlist of companies interested in buying troubled Indian IT supplier Satyam, according to multiple reports in India and the US.

IBM, which already has a significant presence in India, has been mooted as a possible acquirer but has yet to confirm this.

The US IT giant is said to be one of eight possible acquirers of Satyam. Others on the shortlist include Indian engineering firm Larsen & Toubro, Tech Mahindra and Spice Group.

IBM told Computer Weekly last week that it would not comment on speculation.

Andy Gallagher, consultant at Compass Management Consulting, said he is not surprised by IBM's inclusion.

"Whoever buys Satyam will have to be able to satisfy its customers that it has the financial resources and delivery capability they require," he said.

IBM could cut its staff costs through such an acquisition by moving more roles offshore. "It could pick up a pool of highly skilled andmotivated staff and enable it to lower staff costs in high-cost regions," Gallagher said.

According to reports,IBM plans to cut up to 5,000 more US jobs as the company moves to maintain profit in the economic downturn by moving work to India.

IBM would have the resources to get Satyam back on its feet, but winning over its staff will also be essential because they are a valuable resource. IBM's experience in India as well as its IT heritage could make it an attractive option.

"I think IBM will be an attractive employerfor the Satyam workers," said Gallagher.

Western firms could be put offbidding for Satyam because ofthe $1bn accounting fraud that wenton for several years. The firm's former chairman B Ramalinga Raju resigned and confessed to inflating the company's financial figuresin January.

US firm iGate recently pulled out of the race.

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