TCS backed out of talks to buy Dell's Perot Systems

MUMBAI/BENGALURU: Tata Consultancy Services negotiated with Dell to buy its information technology management business Perot Systems, but a disagreement over price resulted in the talks falling through, two people directly aware of the discussions said.

N Chandrasekaran, the CEO of India's largest software company, and TCS global head of merger and acquisitions Debasis Poddar, were involved in the talks that took place at least a week ago, according to the sources.

"TCS was in the bidding. Poddar and Chandra were both involved, but the price was an issue," said one of the people mentioned above. He requested anonymity since the discussions were confidential.

TCS declined to comment. Dell did not immediately reply to an email seeking its view.

On Friday, Reuters reported that Dell was in talks with Cognizant, NTT Data and Atos to sell Perot Systems as part of a plan to lessen debt after agreeing to buy EMC Corp for $66 billion. It said Dell was hoping for at least $5 billion from the Perot sale.

Perot Systems is a provider of IT outsourcing and consulting services to hospitals and government organizations and departments in the United States.

The race to acquire Perot Systems comes at a time when M&A activity has picked up in the Indian IT services space. Earlier this week, Wipro paid $130 million to buy US-based back-office outsourcing firm Viteos Group, marking the company's second acquisition in less than a month.

This year, both Infosys and Wipro have aggressively pursued acquisitions as part of a broader strategy to revive their own fortunes and kickstart growth in order to catch up with larger rivals such as TCS and Cognizant.

In the last 12 months, Infosys has spent hundreds of millions of dollars acquiring three companies -- Israel-based Panaya, US-based Skava and more recently Noah Consulting.

Cognizant's big acquisition deal was concluded last year when it bought healthcare specialist TriZetto for $2.7 billion.

TATA Consultancy Services ( TCS )