TRW and Satyam to Form Strategic Alliance for Info Systems and Engineering Services
8 June 2000
Technology JV to Accelerate Time-To-Market, Lower Costs
CLEVELAND - TRW Inc. and Satyam Computer Services Ltd. announced today that they have signed a letter of intent to form a first-of-its-kind strategic alliance under which a newly formed joint venture will provide world-class information systems and engineering services to TRW and other multinational companies."This unique strategic supplier arrangement gives TRW access to a multifaceted, totally integrated information systems and engineering services supplier," said David M. Cote, TRW president and chief operating officer. "Satyam's 6,000-plus infotech professionals and worldwide network of software development centers will be on call 24/7 to provide TRW virtual on-site support anytime, anywhere. In Satyam, I believe we've found a partner whose philosophy is to create value by demonstrably improving its clients' business performance, not merely improving their systems and processes."
TRW and Satyam will jointly establish a U.S.-based independent sales and marketing company that will procure business from both TRW and other customers. Satyam will own a 76 percent majority interest in the venture, with TRW's equity interest at 24 percent.
Under the agreement, the planned venture will be TRW's strategic supplier for certain engineering and information systems services. It will augment TRW's operational resources in its corporate shared services, automotive, aeronautical systems, and systems information organizations. Over five years, TRW intends to channel approximately $200 million of business through the new company. While the U.S. operations site has not yet been determined, it is anticipated that Satyam's state-of-the-art Hyderabad, India, facility will provide the venture with technical support services.
The scope of work for TRW will involve broad software development, engineering, information systems, and e-business services and will include enterprise resource management, supply chain management, and computer-aided design and modeling.
The venture will also work with TRW's Systems & Information Technology Group, a $3 billion business based in Reston, Va., that provides systems, services and information technology to government and commercial enterprises. Satyam will augment the group's information resources on projects for commercial customers and help TRW provide cost-effective solutions to meet customer needs.
"We are extremely pleased to be teamed with Satyam, a dynamic and successful company recognized globally for its state-of-the-art development centers and engineering and information capabilities. Our strategic partner is well respected by many of the world's leading corporations, and we greatly value the technical capabilities of Satyam's people," said Cote. "This strategic supplier relationship will be a great step in TRW's ongoing battle to reduce costs company-wide. I'm confident this will do much to help us achieve our competitive goals and better serve our customers by improving time-to-market for engineered services."
Satyam Chairman B. Ramalinga Raju said, "The unique alliance with a leading Fortune 500 company is recognition of Satyam's efforts in creating exceptional value for its customers. This relationship offers an unprecedented opportunity for Satyam to establish itself further as a major information technology vendor globally. A notable aspect of this relationship is that we will be working with TRW primarily on a number of high-end technologies and services. This has the potential to become a big win for both partners."
TRW Inc., headquartered in Cleveland, Ohio, is a $17 billion company that provides advanced technology products and services to the automotive, aerospace, and information systems markets worldwide.
Satyam Computer Services Ltd., an SEI-CMM Level 5 company, offers a range of expertise in the areas of Information Technology: Software Development Services, Systems Integration, ERP Solutions, Product Development, Internet access and hosting services, Electronic Commerce and Consulting.
Note: Statements that are not statements of historical fact may be forward-looking statements. Important factors that could cause TRW's actual results or expected events to differ materially from the forward-looking statements contained in this release include the ability of TRW and Satyam to consummate, among other things, the joint venture arrangement; the ability to outsource certain engineering and information services on a cost-effective basis; and the ability to design and develop e-business initiatives for business systems and processes. Additional factors can be found in Item 7, "Management's Discussion and Analysis -- Forward-Looking Statements," in the company's most recent Form 10-K. TRW undertakes no obligation to update any forward-looking statement.