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Xerox may buy controlling stake in India unit

As a first step towards consolidating its Indian operations, Xerox Corporation has initiated negotiations with B K Modi for buying controlling stake in Modi Xerox Software Services.

T O D A Y

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According to sources, the US-based $18 billion firm is likely to hike its stake in MXSS to over 70 per cent, up from the existing 50 per cent.

This issue is also expected to be taken up in the company's forthcoming board meeting later this month.

Sources also point out that this deal would pave the way for Xerox to negotiate for a higher stake in other Xerox group ventures in India - Modi Xerox and Modi Xerox Financial Services.

Company officials, while confirming the ongoing negotiations, did not comment on the issues being discussed. They also ruled out any deal being finalised in the near future.

Xerox had announced restructuring of its organisational structure worldwide and placed India among the more powerful emerging world markets. Xerox had earlier placed India, Russia and China in its 'emerging markets' team but has now decided to expand the horizon of this category.

According to sources, the 'emerging market' team would now also include South America, Africa and the Middle East markets that would make this a bigger bloc.

This decision, add sources, would enlarge the group and help Xerox exert more focus and allocate more products and resources for these markets.

Sources also pointed out that the chief of emerging markets would report to the CEO of Xerox which places this group close to the decision makers in the US.

Xerox had made a statement from US expressing its willingness to hike its stake in the Indian operations with Modis but Alexander Wasilov, president, emerging markets, during his visit to India later denied any plans of raising the equity stake.

Later, Xerox had applied to the Foreign Industrial Promotion Board seeking clearance for setting a 100-per cent subsidiary. This proposed subsidiary was established to make investments in acquiring more shares in companies in the fields of high technology multiplication, reproduction equipment, systems and services including document management systems.

The subsidiary also proposed to hold existing investments of Xerox subsidiaries in India.

- Compiled from the Indian media

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