Tech Mahindra Merges BPO Unit vCustomer Philippines with Parent

Tech Mahindra Ltd provides comprehensive range of IT services, including IT enabled service, application development and maintenance, consulting and enterprise business solutions, etc. to a diversified base of corporate customers in a wide range of industries. It is one of the top 5 largest IT companies in India.

Tech Mahindra Ltd. Announces Subsidiary Merger

Tech Mahindra Ltd. has approved the merger of its step-down subsidiary, vCustomer Philippines (Cebu), with its parent company, vCustomer Philippines Inc., a wholly owned subsidiary. Both entities are engaged in providing business process outsourcing (BPO) services. According to Tech Mahindra’s statement, this consolidation is aimed at promoting efficiencies and reducing administrative and operational costs across all business facets.

The company emphasised that the merger will streamline business operations, achieve greater efficiency in resource utilisation, and consolidate the ownership of assets under vCustomer Philippines Inc. The merger is scheduled to take effect from April 1, 2024, pending regulatory approvals in the country of incorporation.

Financial Impact and Operational Benefits

Tech Mahindra clarified that the merger will not result in any financial gain or loss but will be a pooling of interests between vCustomer Philippines Inc. and vCustomer Philippines (Cebu). With reported revenues of $675,121,320 for vCustomer Philippines Inc. and $2,326,036,199 for vCustomer Philippines (Cebu), the merger is expected to bolster the financial stability and operational capabilities of the unified entity.

Given that both companies involved are wholly owned subsidiaries of Tech Mahindra, there will be no cash consideration or issuance of new shares as part of the merger plan. This structural consolidation is anticipated to bring about enhanced operational synergies and cost efficiencies.

Conclusion: The merger between vCustomer Philippines Inc. and vCustomer Philippines (Cebu) signifies a strategic move by Tech Mahindra to optimize its BPO services and reduce operational complexities. By unifying these subsidiaries, the company aims to achieve greater operational efficiency and cost savings, ultimately strengthening its market position in the BPO sector.

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