The Indian business process outsourcing and knowledge process outsourcing industry is likely to witness as many as 100 mergers and acquisitions worth $3-5 billion from 2006 to 2010.

"It has been estimated that out of the projected $3-5 billion transactions in BPO and KPO industry about 80 per cent of will be cornered by big players in the industry," a study jointly conducted by industry body Assocham and knowledge service expert Evalueserve, said.

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The remaining 20 per cent of the transactions would go to smaller companies which would be around 400 in number, the study added.

"Approximately, a little over 20 big deals for merger and acquisitions and IPO are expected to be struck in the BPO and KPO arena, which will have the participation of about 10 large listed players," Assocham president Mahendra K Sanghi said.

Large captives may be spun off when their parent companies want to divest their stakes or mid-size captives may be acquired by third party BPO companies, it said.

The most frequent modes of mergers and acquisitions would continue to be IPOs of large third-party vendors, it said.

The industry body said integration might not be a problem, when one BPO company acquires another in their culture and process, however, the case will be different when a BPO company acquires KPO company.