Tata Consultancy may buy Citi's India BPO arm: report

S. Ramadorai, chief executive officer of Tata Consultancy Services (TCS), speaks during a news conference to announce quarterly financial results in Mumbai July 16, 2008.

MUMBAI (Reuters) - Tata Consultancy Services (TCS.BO) is close to acquiring Citigroup's (C.N) captive backoffice unit in India for about $500-$550 million, the Economic Times said on Tuesday, citing a source close to the development.

The announcement of a deal for Citigroup Global Services is likely to be made "within three weeks", the paper said.

TCS, India's top software services exporter, has edged IBM (IBM.N) in the race for the Citi unit and the deal would guarantee TCS business for the unit from Citigroup for five years, the paper said, citing this source.

A spokesman for Citi in India declined comment on the report. A spokesman for TCS also declined comment, calling the report speculative.

The Economic Times had reported in June Citigroup was restructuring its India backoffice operations and that it may sell or outsource most of these assets.

Citigroup unveiled a reorganization of its Asia-Pacific business on Monday, giving its regional heads increased authority. See <ID:nHKG110486>.

(Reporting by Rina Chandran; Editing by Charlotte Cooper)