Infosys to buy Philips' global finance BPO - UPDATE

BANGALORE - Infosys Technologies (nasdaq: INFY - news - people ) is set to acquire Royal Philips Electronics (other-otc: PHGZF.PK - news - people ) NV's global finance and accounts business process outsourcing unit for an assured revenue of 200 mln usd over five years, according to a report on the Business Standard website.

India's second-biggest software-maker will be taking over all the costs of this acquisition, similar to the manner in which rival Tata Consultancy Services bought the operations of UK's Pearl Group insurers, the website reported.

The acquisition will add to Infosys current BPO unit, which has close to 11,000 employees, providing the company with round-the-clock processing, the report added.

Philips has its finance and captive operations in Chennai, Warsaw and Bangkok with a total headcount of 1,500.

'We do not comment on market rumours,' said Infosys in a reply to an email.

Philips, on the other hand, said it could neither confirm nor deny the news regarding the possible takeover of its finance and accounts BPO.

It is too 'premature' for us to get into any specifics, Philips Electronics India's corporate communications director Moushumi Dutt said in response to an email asking for the company's expectations from the deal.

Infosys chief executive S Gopalakrishnan had recently said that on the BPO side, if the Indian rupee continued to appreciate the company would have to look at new markets.

He had also said: 'Any target company has to 'meet our criteria' and should want to be acquired.'

The company has a current cash reserve of 1.5 bln usd.

Infosys BPO, formerly Progeon, contributed to 36.7 pct of Infosys' quarterly revenues as on June 30.