BANGALORE, INDIA: Wipro Technologies, IT services business of Wipro Limited, and Citigroup Inc., the global financial services company, today announced that they have reached an agreement for Wipro to acquire Citi Technology Services Ltd.

Wipro has acquired the India-based captive provider of Citigroup that provides information technology services and solutions to Citi entities worldwide, for an all cash consideration of approximately $127 million.

Out of this $26 million will be paid in cash while the remaining $101 million will be in the form of assets.

As part of the transaction, Wipro and Citi will sign a Master Services Agreement for the delivery of Technology Infrastructure Services (TIS) and Application Development and Maintenance (ADM) services for a period of six years.

The agreement provides for the delivery of at least $500 million in service revenues over the period of the contract.

Based in Mumbai and Chennai, Citi Technology Services provides IT services to Citi and its affiliates around the world and has approximately 1,650 employees trained in Citi processes and technologies, servicing Citi businesses in more than 32 countries.

Citi Technology Services’ revenues are expected to be approximately $80 million in CY2008.

“Citi has played a pioneering role in leveraging technology for banking. We are pleased that our domain expertise and infrastructure management capabilities positioned us as their partner of choice,” said Girish S. Paranjpe, Jt CEO, IT business and Member of the Board, Wipro.

“This position has further strengthened with this strategic transaction. We are delighted to welcome the employees of Citi Technology Services into the Wipro family,” he added.

Don Callahan, chief administrative officer, Citi said, “This sale was the result of a thorough process to ensure we were partnering with the right company for our businesses and our clients.

“Wipro, with its wide range of services, extensive experience and broad global presence can play a significant role in meeting Citi’s objectives of productivity improvement, while our Citi Technology Services employees will join a larger information technology organization with additional third party growth opportunities.”

He said this transaction is consistent with Citi's efforts to improve the operating leverage while focusing on its core banking competencies.