Tata Consultancy Services (TCS), India's largest IT services provider, has signed a definitive agreement with Japan's Mitsubishi Corporation to create a new IT services company in Japan through merger of three of their subsidiaries.
Accordingly, the two will merge TCS' Japanese arm TCS Tata Consultancy Services Japan Limited, Mitsubishi group IT service provider IT Frontier Corporation (ITF) and Nippon TCS Solution Center Limited (NTSC), a joint venture between Mitsubishi and TCS Japan.
TCS will hold 51-per cent in the initial capital of the joint venture, with Mitsubishi owning the remaining 49-per cent of the new company.
The joint venture, which will be based in Tokyo, is expected to start operations on 1 July 2014.
''The venture will serve to deepen the collaborative framework between both companies as they pool their individual capacities to create synergies that deliver improved customer service and achieve sustainable growth,'' the two said in a joint statement.
''By combining the customer service strengths and knowledge of the Japanese market developed by MC and ITF with the competitively priced IT services offered globally by TCS, the new company will make a contribution to upgrading the quality of IT services in Japan and improving its global competitiveness,'' according to the statement.
''In so doing, the new company will not only expand its presence in the Japanese market, but will also seek to provide speedy and efficient IT services that strengthen the capacities of Japanese companies to launch operations overseas. The new venture will also bolster the IT support structure for MC Group offices and subsidiaries worldwide by providing the upgraded and expanded IT platforms that are necessary for facilitating business development,'' it added.
"This strategic transaction signified our serious commitment to the Japan market. TCS will now have the scale, strong local presence and our full range of global capabilities to serve the Japanese corporations effectively and accelerate our growth in Japan market,'' TCS's CEO and managing director N Chandrasekaran said.
"We deeply value the partnership with Mitsubishi Corporation and look forward to leveraging our mutual strengths in the Japan market," he added.
With a global presence in 46 countries, TCS applies its unique Global Network Delivery Model to provide highly competitive, high-quality services to customers.
''The TCS-MC partnership will, by way of the new company, seek to expand the Japanese market, while at the same time contributing to upgrading Japan's IT services and strengthening its competitiveness,'' the statement added.
A part of the Tata Group, India's largest industrial conglomerate, TCS has over 300,000 of the world's best trained consultants in 46 countries. The company generated consolidated revenues of $13.4 billion for year ended 31 March 2014.