Tata to merge with its systems integrator-subsidiary

Indian outsourcing giant Tata Consultancy Services, which posted a healthy growth in the last financial quarter, will be merging with sister unit Tata Infotech in a bid to increase operational efficiencies.

After reporting a growth of almost 34 percent in the last financial quarter, ending June 30, Tata Consultancy Services (TCS) announced it will be merging operations with its sister unit Tata Infotech Ltd (TIL). The move will help increase efficiencies in operations, according a media statement released by the company.

TCS reported net profits of 6.3 billion rupees (US$144 million), almost 34 percent increase over the same quarter of last fiscal year.

In its press release, the company stated that the merger is expected to give TCS "greater customer base, as well as deeper penetration in key geographies", particularly in the systems integration area which TIL has a "significant presence" in.

TIL specializes in systems integration, hardware manufacturing and IT education. The majority of the shares in TCS and TIL are held by Tata Sons, which will continue to retain the majority after the merger.

TCS made the news recently when it announced a joint venture with Microsoft and three other Chinese companies to establish an IT outsourcing company in China.