When contacted by ET NOW, the Fidelity spokesperson said: “After an intense review and thorough evaluation, it was decided that we will maintain the FMR India IT organisation at this time. It continues to be business as usual for FMR India.”
ET NOW had first reported on Fidelity’s move to divest the IT captive in its edition dated December 15, 2008. The captive unit employs 2,000 people across units in Bangalore and Chennai and provides back-office technology support to Fidelity’s US operations.
While Infosys and Wipro, had expressed interest to buy the unit, Hewlett Packard-owned EDS and Accenture made it to the final shortlist of bidders. The information memorandum sent to interested parties last year by Fidelity had clearly stated that it was looking at a player of global standing.
The firm had also factored in certain geo-political risks associated with the South Asian region, while taking a call on which bidders to shortlist, one of the major reasons why firms like Infosys had to step out of the race.
The EDS deal was supposed to be completed by May-end, but a company executive, speaking on condition of anonymity, said that issues pertaining to valuation became a stumbling block in the parties coming to any sort of agreement. FMR’s value had been pegged at $150 million and the acquirer was to walk away with a $500 million outsourcing deal.
Fidelity is a significant client for Infosys Technologies, which has over 3,000 people working on the account. The company generates roughly $50 million revenue from outsourced work to the world’s largest investment manager.
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