Investor pressure: Satyam-Maytas 1.6 bn deal called off

Hyderabad, Dec 17: Satyam Computers on Wednesday, Dec 17 called off $1.6 billion deal to buy Maytas Infrastructure and Maytas Properties after the key investors in the company opposed the acquistion plan. There was growing opposition to the deal and the investors even urged the government to intervene. The government on Tuesday, Dec 16 said that it would look into it if there is a violation of the Companies.

Satyam earlier on Tuesday, Dec 16 announced that it would takeover Maytas Infrastructure and Maytas Infra, the two firms which are promoted by the sons of Ramalinga Raju, the chief of Satyam Computers, for Rs 8,000 crore. India's fourth largest IT company announced that it would buy Maytas Properties for $1.3 billion and a majority 51 per cent of Maytas Infrastructure for $0.3 billion. Institutional investors such as Reliance Mutual Fund, SBI Mutual Fund and Templeton had expressed dissent over the deal soon after it was announced.

Satyam chief Raju told CNBC-TV 18 channel that the decision to call off the deal was taken after seeing reverse investor reaction. He defended the decision. He said that the merger won't help because of Satyam's low valuations and took the decision in good faith.

Raju said that there is no uncertainty in the IT business and the IT, BPO mid terms are doing extremely well. He added that in the next two years IT industry could face 'trying times.'

OneIndia News (With inputs from Agencies)