TCS may get T-Systems stake for services

MUMBAI: Tata Consultancy Services Ltd. may get a stake of up to 10 per cent in Deutsche Telekom unit T-Systems in exchange for executing $1 billion worth of orders, the Hindustan Times reported on Monday, quoting sources.

"According to highly placed sources, the barter deal will give TCS a minority stake in T-Systems, equivalent to the value of the service contract," the paper said.

Last week German business weekly Focus Online reported the steel-to-software Tata group was in concrete talks about buying a stake in T-Systems, but Indian papers subsequently reported the Indian firm felt the valuation was too expensive.

A spokesman for TCS, India's largest software exporter, last week said the reports were all speculative and the company did not comment on speculation.

TCS, part of the Tata group whose Tata Steel company recently won an auction for Anglo-Dutch steel maker Corus Group Plc. with a $12 billion bid, has been looking for acquisitions to boost its presence in Europe.

T-Systems, a provider of internet and telecom services for businesses, last year had revenues of 12.6 billion euros and an adjusted operating profit of 1.23 billion euros.

T-Systems had said it was looking for a strategic partner to strengthen its international business, but was not up for sale.