Merger of services firms to see Patni abandoned?
Thirty three years after it was founded, it looks likely that the Patni brand – synonymous with Indian IT services and outsourcing – might not be long for this world.
According to a source close to the latest discussions, it is unlikely that the merged iGate Patni will retain the Patni brand for much longer.
Patni was founded by three brothers, Narendra Patni, Gajendra Patni and Ashok Patni, in 1978. They sold their stake in the firm to US-based iGate for around $1.2bn in January of this year, to form the merged iGate Patni. iGate was founded in 1996, 18 years after Patni.
But a source told CBR, "With the Patni brothers now exiting the business, retaining the Patni brand in the name iGate Patni makes less and less sense. It’s unlikely that Patni will be retained in the company name for much longer, in my view."
It’s understood a study is underway to assess the value and merits of the brands before a final decision is taken, though Patni is likely to make way for just iGate, or even something completely different.
Prior to the acquisition of Patni, iGate had approximately the same size market capitalisation despite being around half its size. Both firms offer a broad sweep of outsourcing, business process outsourcing and related IT services, and both were looking to grow their share of the more lucrative consultancy market. The firms are quite complimentary considering that iGate was much stronger in financial services (and in the US market) than Patni, while Patni had a product engineering business that iGate lacked.
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