IBM dismisses report of investment in Satyam

IBM on Tuesday dismissed as rumor a report that said the company has held talks to acquire a stake in Satyam Computer Services, an outsourcer in Hyderabad, India.

"We do not comment on rumors and speculation," said Varsha Chainani, a spokeswoman for IBM in India.

The Financial Times of London reported Monday that IBM has held talks to acquire a stake in Satyam Computer Services, India's fourth largest software services company.

In a strongly worded statement that referred to IBM indirectly as a "global systems integrator", Satyam also denied any investment talks with IBM.

Satyam said it wished to put to rest once and for all "any rumors of having entertained in the past, directly or indirectly, any such talk or dialogue with any global systems integrator."

The company does not intend to get into such negotiations, which it considers would not be in the best interests of its stakeholders, it said.

Indian software services and business process outsourcing companies have been acquisition targets for the last couple of years, as multinational technology companies, particularly services companies, try to build low-cost services capability in India.

In 2004, IBM acquired Daksh eServices, a BPO company near Delhi. Last year, IBM acquired Network Solutions, an infrastructure services company in Bangalore, India, but the acquisition was focused on strengthening IBM's networking and managed services for the Indian market.

In 2003, Perot Systems bought out its Indian partner, HCL Technologies, in their joint venture HCL Perot Systems in Noida near Delhi. In the same year, it also acquired Vision Healthsource India, a Chennai-based provider of billing and claims solutions for healthcare service providers in the US.

Oracle also last year acquired a 41 percent stake in i-flex solutions, a publicly held banking software company.

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