Business

Mahindra Satyam and Tech Mahindra approve merger plan

Mahindra Satyam headquarters
Image caption Mahindra Satyam has been trying to rebuild after the accounting scandal

Tech Mahindra and Mahindra Satyam have announced plans to merge, a move that will create one of India's biggest software companies.

The new entity will have combined revenues of $2.4bn (£1.5bn).

Mahindra Satyam was created after Tech Mahindra bought a major stake in Satyam Computers, the firm involved in one of India's biggest accounting frauds.

Satyam's founder Ramalinga Raju admitted in 2009 that the company had been overstating profits for years.

The company was given a lifeline after Tech Mahindra purchased a major stake.

Renamed Mahindra Satyam, it has been trying to rebuild and the merger is seen as a major step in the process.

"The Mahindra Satyam turnaround is a shining story of determination and grit and now comes to its most important chapter, with this merger" CP Gurnani, chief executive of Mahindra Satyam, saidin a statement.

According to the latest data, the company made a net profit of 3.08bn rupees ($61m, £38m) in the three months to the end of December, a jump of 424% from a year earlier.

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