Tata Consultancy Services, or TCS, has completed the acquisition of Citigroup’s interest in Citigroup Global Services, the India-based captive business processing outsourcing business, for an all cash consideration of $512 million.
In addition to the sale, Citi has signed an agreement with TCS to provide, through CGSL, process outsourcing services to Citi and its affiliates over a period of 9.5 years. The agreement builds on the existing relationship between Citi and TCS whereby TCS provides application development, infrastructure support, help desk and other process outsourcing services to Citi.
The transaction is expected to help reduce operating expenses related to business processing and will allow Citi to focus on its core financial services competencies. According to Citi, it will reduce its total headcount by more than 12,000 employees, all of whom are located in India.
N Chandrasekaran, COO and executive director of TCS, said: This acquisition gives us the ability to offer an end-to-end, domain-led third-party solution for business operations to our large financial services clients. We will also work to create platforms for the future and integrate our strong domain expertise in operations along with our suite of products for the financial services sector.