GSK inks 5-year pact with Satyam; board meet today

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Hyderabad: As part of reposing faith, global pharma major GlaxoSmithKline (GSK) has signed a new five-year support contract with Mahindra Satyam, the new brand identity of Satyam Computer Services Ltd, for SAP and other critical systems support to its businesses across the world. Satyam has been working with GSK since 2002, providing IT application development and support services.

Meanwhile, the company has called a board meeting on July10 which is claimed as 'periodic update'. However, sources pointed out that the meeting was expected to discuss the second round of preferential share allotment to raise Tech Mahindra's stake in the firm to about 42.7%. It may also decide to keep stake at the existing level of 31%, which was acquired for Rs 1,756 crore.

Incidentally, but for the poor response to its open offer for another 20%, Tech Mahindra would have acquired 51% in Satyam. The company has to spend more if it wants a majority holding since the preferential issue would expand the share capital as well.

Even before the Rs 7,000-crore fraud, the company had relationship with GSK for both IT services and artwork and labeling services through Satyam BPO. Brushing aside all rumours about GSK snapping ties with Mahindra Satyam, the company has charted strategies for building long-term relationships in the near future.

In a release, Bill Louv, chief information officer, GSK, said: "We are delighted to be able to extend our contract for another five years. We look forward to continuing to receive the high level of professionalism and commitment from Satyam and its associates that we have experienced over the past seven years."

"GSK's selection truly recognises the competitive spirit and resolve of the associates of Mahindra Satyam, whose skills, commitment and delivery excellence were unmatched," CP Gurnani, CEO of Mahindra Satyam, said in a release. This is a reflection of the fact that we are well on our way to regain our position as a market leader and we are thankful to GSK for having reposed their faith in us, he added.