Oracle Increases Stake in India’s I-Flex

Oracle intends to acquire another 20 percent of the equity of Indian financial software company I-Flex Solutions.

Oracle informed the Bombay Stock Exchange (BSE) in Mumbai on Wednesday of its intention. Oracle has offered to buy 16.63 million equity shares in I-Flex for 1,475 Indian Rupees (US$32) per share. The deal will total about $531 million if I-Flex shareholders accept the offer, which opens Nov. 6 and closes Nov. 25.

Oracle of Redwood Shores, Calif., already holds a majority stake in I-Flex, based in Mumbai. The company announced last month that it would invest $125 million in I-Flex to increase its stake from 52.5 percent to 55.1 percent. The investment would help I-Flex fund its $122.6 million cash acquisition of Mantas, a vendor of anti-money laundering and compliance software and services in Herndon, Va., I-Flex said. Oracle had said in August that it intended to increase its stake in I-Flex to meet Indian regulations regarding the acquisition of shares and takeovers.

A number of multinational companies that have bought stakes in Indian companies have then bought out joint venture partners or minority shareholders.

In 2003, Hewlett-Packard (HP) bought out the public share holding in Digital GlobalSoft, a software development and services subsidiary in Bangalore in which it had a majority holding. HP said at the time that it did not want a listed subsidiary in India because then it would be accountable to two sets of shareholders: HP’s and Digital GlobalSoft’s.

IBM also bought out its joint venture partner, the Tata Group, to run its Indian operation as a wholly owned subsidiary. Oracle has, however, stated that it would like to retain the independence of the management and operations of I-Flex.

-John Ribeiro, IDG News Service (Bangalore Bureau)

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