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TCS' Japan Unit Merges With Mitsubishi's IT Frontier [DealCurry (India)]
[April 24, 2014]

TCS' Japan Unit Merges With Mitsubishi's IT Frontier [DealCurry (India)]


(DealCurry (India) Via Acquire Media NewsEdge) @Tata_Consultancy Japan Limited, IT Frontier Corporation (Mitsubishi Corporations 100% IT subsidiary) and @Nippon Limited (NTSC) are merging to create a single IT services company with a base of over 2400 associates in Japan.



NTSC is a venture between Mitsubishi and TCS Japan that was launched in 2012.

Post the consolidation TCS would hold 51% stake and Mitsubishi would hold remaining 49% interest in the entity which is expected to be operational by July 2014. TCS has the option to increase its holding to 66% in the near future and then increase it further. Mitsubishi will be the largest client of TCS, which counts Nissan and Sony among its 60 Japanese clients.


The equity plus cash deal values the combined entity at $300 Mn . TCS would be paying $50 Mn to Mitsubishi to achieve its 51% holding.

TCS has been present in Japan since 1987 aiding Tata group to build a host of other businesses, including automobiles, in the country. It had also set up a near-shore facility in Yokohama in 2002.

The deal would increase its employees to 2,400 and ramp up its operations in the $100-billion Japanese market as TCS expects total revenue from the entity to be around $600 Mn a year in the next fiscal year.

Tata Consultancy Services (TCS), had recently broken into the league of top 10 global IT services companies, moving from the 13th position in 2012 to the 10th spot in 2013. TCS is estimated to have IT services revenues of $10.1 Bn (out of its total revenues of about $12.5 Bn).

Last year the company had acquired Alti SA, an IT services company in France, for a value of € 75 Mn in an all-cash transaction.

Recently in this space; Aspire Systems (India) Private Limited had bought Belgian based IT offshoring company Applied Development for an undisclosed amount; BirlaSoft had acquired US based CRM solutions provider EnablePath for an undisclosed amount; Wipro had acquired Opus CMC (Opus Capital Markets Consultants) for $75 Mn.

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