GE Sells Majority Stake of Indian Outsourcing Branch

Yesterday, November 8, General Electric, Co. (GE) sold a majority stake of its India outsourcing arm to two US-based private equity firms for US$500 million.

The sale is expected to free up the in-house unit in order to "expand faster and accommodate new customers."

General Atlantic Partners and Oak Hill Capital Partners will acquire 60 percent equity in GE Capital International Services, a deal that analysts and GE officials said could set the trend for other Western companies that have set up centers in India to handle their back-office operations.

"We will now have unrestricted access to the world market," said Pramod Bhasin, president and the chief executive officer of GECIS.

Bhasin said he hopes the restructuring would help GECIS expand faster in Eastern Europe and China and double its revenues in three to four years.

GE wishes to retain a stake in GECIS even after the sale in order to "ensure continuity," according to an article in the Economic Times of India.

GE Capital Services (GECIS), launched in 1993 in New Delhi as part of its GE Capital unit, is the largest outsourcing operation of a US or European firm in India.

The Wall Street Journal reported earlier that there were talks of selling GECIS, and that the BPO operation could fetch as much as US$1 billion.

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