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Citi in talks to sell stake in Indian BPO arm-paper

Citigroup is in talks with IBM Corp.  among others about selling a strategic stake in its Indian business process outsourcing (BPO) arm, Citigroup Global Services Ltd, the Mint paper said on Wednesday.

Quoting industry sources, the paper said the BPO unit could be valued at over $1 billion, based on estimated annual revenues of $300 million-$400 million.

“Citi has started feeling the market for a strategic stake sale. The process has started and it may take a while before concluding the deal,” the paper said quoting people familiar with the development.

Citigroup's India head Sanjay Nayar declined comment, the paper said. An IBM spokeswoman told the paper the company would not comment on rumours and speculation.

The deal could be structured similar to one between IBM and Bharti Airtel  India's top mobile services firm, the paper said quoting a source close to Citigroup.

In the 2004 deal, IBM took over Bharti's IT operations for assured revenues of up to $750 million over a 10-year period, the paper said.

“There could be a similar arrangement whereby IBM would run Citi's BPO operations for a fee. In addition to that, if could pick up a strategic stake,” the source close to the bank told the paper.

Source : Reuters

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