The companies will be jointly developing applications and technology in India for the defence and security market and addressing the Battlefield Management System (BMS) for the Indian Army, Mahindra Satyam announced in a statement.
The IT firm has not revealed details on the size of the deal. However, media reports quoting sources suggest that the deal is in the range of 400 to 500 million dollars.
"This relationship will jump start our foray in mission critical areas of defense," Mahindra Satyam CEO C P Gurnani said.
"We view this relationship with Mahindra Satyam as a strategic meeting of two highly skilled teams believing in technical and engineering excellence," Saab President and CEO Ake Svensson said.
Mahindra Satyam was born out of the Tech Mahindra's takeover of fraud-hit Satyam computers.