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June 2, 1999
Tatas to divest holding in IBM venturesTata Industrial Limited and IBM World Trade Corporation today announced that the Tatas would divest holding in Tata IBM Limited and IBM Global Services India Limited, to IBM World Trade Corporation.
The decision by Tatas to divest has been taken under a mutual arrangement for the reorganisation of the ownership of Tata IBM Limited and IBM Global Services India Limited.
Currently, Tatas hold a 50 per cent stake in Tata IBM Limited and a 10 per cent stake in IBM Global Services India Limited. After the divestment, IBM will arrange to acquire the holding in Tata IBM Limited and IBM Global Services India Limited at a mutually agreed price.
Tatas will continue to hold a 1 per cent equity stake in Tata IBM Limited. The new shareholding structure will come into effect following approval from the Government of India.
Ratan Tata, chairman, Tata Industries, said, this decision is the outcome of an agreement between the Tatas and IBM. "We have learnt a great deal from IBM, which is a model for managing the complex information technology business globally. Our relationship has been cordial, constructive and characterised by mutual co-operation," he said.
John Joyce, president, IBM Asia-Pacific, said, "We value and cherish our association with the Tatas. We are deeply appreciative of their help in our business. Let me reaffirm IBM's commitment to India, both as a market and as a resource base."
IBM will remain committed to its business partners as well as existing and potential customers to ensure that the operations will not be affected in any way by the proposed reorganisation of ownership, a company statement said
All existing contracts and other business arrangements with Tata IBM and IBM Global Services India will remain in force, he added.
The name of Tata IBM Limited will undergo a change after the new shareholding structure comes into effect, Joyce said.
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