Two bidders start due diligence on Satyam; IBM one of them

IBM has been looking out for a stake in Satyam for the past three-four years with almost a close touch-and-go in 2006, which is one of the two to bidders have accessed the data centre, CNBC-TV18 reported citing unnamed sources.

In the last board meeting, former Satyam chief Ramalinga Raju had mentioned to the board of directors how he thought Satyam would be a hostile takeover candidate by IBM. So they have been looking at Satyam for some time right now and finally they have thrown their hat in the ring.

If IBM is successful, it first has Satyam's 40,000-odd employees in its armour, which, when combined with the presence that IBM already has in India, takes its employee strength to over one lakh employees. That is close to TCS' and Infosys' headcount.

IBM has a strong back-end presence and delivery expertise in both Oracle and SAP and finally, it gets a host of customers for that. It could be a challenge too - as these Satyam customers would be smaller in size than what IBM is used to. IBM will then too need to do some customer upgradation and data mining.

A whole host of analysts are also of the view that at this point in time IBM will be able to take care of both Sun and Satyam at the same time because its hardware acquisition, which is Sun, and here it is looking at a service acquisition. If both are bought at the same time - and quite cheaply, as Sun's prices too fell recently - both acquisitions would be a good buy for IBM.

IBM already has a financial backing to go with this, so most analysts are looking at this development a little positively. Satyam acquisition to propel IBM to big league of Indian IT: Forrestor Researcher