The High Court in Karnataka, India, has approved plans by Electronic Data Systems to merge its Indian subsidiary with MphasiS, a publicly listed outsourcer in Bangalore.

In July 2006, EDS announced its decision to merge EDS Electronic Data Systems India Private with MphasiS in which the U.S. company had already acquired a majority share of 51.4%.

The merger was approved by MphasiS shareholders in November.

With the ruling by the High Court in Karnataka, the merger of MphasiS and EDS India is now complete, the companies said. The merger was approved earlier by the Mumbai High Court.

Under Indian corporate law, the merger required approval by both courts.

MphasiS is listed on both the Bombay Stock Exchange and National Stock Exchange in India.

Under the agreement, the company will issue 44.11 million shares to EDS. As a result, EDS will increase its stake in MphasiS to 127.11 million shares and thus own about 61% of the Indian outsourcer, the companies said.

The combined company, to retain the MphasiS name, will have nearly 23,000 people on its rolls. The merger will help EDS quickly increase the size of its operations in the country to take advantage of India’s low-cost staff.

The IDG News Service is a Network World affiliate.