Diversified conglomerate Mahindra & Mahindra (M&M) Friday said it has agreed to buy a 5.5 percent stake of its partner BT Group Plc in its IT arm Tech Mahindra.
M&M's stake in the IT venture was 42.77 percent as of Sep 30, while London-headquartered BT's holding in the company was about 30 percent.
M&M also said it would be waiving off its right to buy rest of BT's stake, allowing the foreign partner to sell the rest of its holdings to other interested parties or in the open market.
"M&M and BT have also agreed that as and when such balance shareholding of BT in Tech Mahindra falls below 10 percent of the issued share capital, the shareholders' agreement between M&M, Tech Mahindra and BT will automatically terminate," said the Indian company in a regulatory filing.
BT's stake in Tech Mahindra has given it a preferred vendor status and the UK-based company is a major cash cow for the joint venture.