Joint Venture News: 15/12/09

INFOSYS MAY FORM JV WITH SIEMENS UNIT
Amit Tripathi, Mumbai
DNA

Infosys Technologies, India's largest IT firm by market capitalisation, is evaluating prospects of forming a joint venture with the IT solutions and services unit of German manufacturing firm Siemens AG, a source familiar with the development said.

Infosys officials could not confirm the development. "We have not looked into it. When it comes up we will see," V Balakrishnan, chief financial officer, Infosys, told DNA Money.

However, the source maintained that teams in Infosys are aware of the development in Siemens and "are secretly working on it". The source added that the deal evaluation is in preliminary stages.

At the end of FY2008-09, Infosys had a free cash flow of over $1.1 billion.

The Siemens unit may be available at an attractive valuation owing to its recent lacklustre financial performance, the source pointed out.

Siemens' IT Solutions and Services was badly hit in FY2009. The unit's revenue fell to euro 1.15 billion from euro 1.46 billion in FY2008. More importantly, the unit failed to earn profits while it had managed a 45million euro profit in the previous year. The order pipeline also reduced from euro 1.39 billion in FY2008 to euro 1.09 billion in FY 2009.