April 6, 2006 9:51 AM PDT

EDS makes offer for Indian outsourcing firm

EDS has made a $380 million offer to buy a majority stake in an Indian business-process outsourcing company.

EDS has made the offer for a 52 percent stake in Bangalore, India-based Mphasis, which has around 12,000 employees.

The U.S. outsourcing giant said last month that it was looking at acquisitions in India, China, Korea and central Europe.

Mike Jordan, CEO of EDS, said in a statement: "This offer is complementary to our overall strategy to enhance EDS' presence and capabilities in India."

Mphasis was embroiled in a fraud scandal last year when three of its former Indian call-center workers were arrested for allegedly looting $350,000 from the accounts of Citibank customers in the U.S.

The EDS acquisition follows the lead set by IBM in 2004 when it paid an estimated 80 million pounds ($140 million) for Indian business-process outsourcing company Daksh.

Mark Kobayashi-Hillary, author of "Outsourcing to India: The Offshoring Advantage," said: "This is another step along the road of Indian IT companies being accepted in the mainstream IT industry."

He said the trend will continue and that it will be two-way, with India's top IT company TCS tipped to be the first to make an acquisition in Europe or the U.S.

Andy McCue reported from London for Silicon.com.

See more CNET content tagged:
Electronic Data Systems Corp., outsourcing, India, outsourcing company, Bangalore


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