Bank of America Corp. and Citigroup Inc. may emerge as bidders for a big Indian outsourcing operation that General Electric Co. is said to be trying to sell.
"They might be interested," said Michael Haney, a senior analyst at the research and consulting firm Celent Communications LLC of Boston.
The banking companies have both said they want to increase their captive processing capabilities in India this year, Mr. Haney said. "This would be a great way to get up to speed quickly. It's a ready-made operation."
The Wall Street Journal reported Friday that GE is hoping to sell all or part of GE Capital International Services, and that the price tag could reach $1 billion. The operation has 12,000 employees in India and 5,000 in Hungary, Mexico, and China.
Mr. Haney said that selling the unit would provide a strong return for GE, and that the growing demand for Indian outsourcing capabilities means that more than one company would want to buy it.
"I'm pretty confident it will happen," he said.
In May, Bank of America created Continuum Solutions Pvt. Ltd., in Hyderabad, India, to handle back-office processing. And last month Citibank said it would spend $112 million to increase its stake in e-Serve International Ltd., a Bombay back-office processor, from 44.5% to roughly 87%.
Both moves indicate that banks are eyeing ownership interests in the Indian companies that are taking on more of the bank processing business.
Mr. Haney said he expects more Indian companies to merge into larger ventures, and more U.S. companies to try to develop presences in the region.
Other potential buyers of the GE unit may include large Indian outsourcing firms or a large U.S. bank that has no captive overseas processing unit, he said.
But the price could be daunting, Mr. Haney said. "There are only a few companies that could afford this."
Spokeswomen for Citibank and Bank of America declined to say whether the companies are interested in the GE unit. Each said speculating on deals is against company policy.
