KPMG US and UK units buy 33% stake in India’s KGS for $210 million

KPMG’s Strategic Restructure: U.S. and U.K. Arms Acquire One-Third Stake in KGS India
KPMG’s US and UK divisions have jointly acquired a 33% stake in KPMG Global Services (KGS) India for $210 million as part of their strategy to optimize global operations. This deal marks a significant shift in KPMG’s approach to overseeing its service delivery unit in India, highlighting India’s rising prominence as a hub for international operations.

Understanding What KGS India Does

KPMG Global Services (KGS) India was launched in 2008 and functions as a shared services platform supporting KPMG’s global network. Spread across major Indian cities such as Gurugram, Bengaluru, and Hyderabad, KGS plays a key role in enabling KPMG to provide high-quality services worldwide. With over 7,000 professionals, KGS helps deliver functions related to audit, tax, consulting, risk management, and IT support to more than 50 member firms in the KPMG global network.

Over the years, KGS has become essential to KPMG’s back-end operations, offering efficient and cost-effective services thanks to India’s rich talent pool and advanced tech ecosystem. It helps KPMG’s member firms focus more on client-facing tasks while KGS takes care of critical support work.

Details of the $210 Million Stake Purchase

Earlier, ownership of KGS was split equally among KPMG India, the United States, and the United Kingdom, with each holding a 33% share. With this new acquisition, the U.S. and U.K. firms have taken full control of 66%, buying out KPMG India’s stake completely. The deal simplifies the ownership model and gives the American and British firms more centralized authority over how KGS operates going forward.

This kind of ownership restructuring is rare among the Big Four firms and reflects KPMG’s intent to align global operations more closely with the needs of their two largest markets. With only two major stakeholders involved, decisions around technology investments, client services, and workforce planning can now be made faster and with fewer internal hurdles.

Impact on KPMG India

KPMG India’s decision to relinquish its stake in KGS has resulted in a substantial cash inflow of $210 million. This money can be used to strengthen local operations, invest in talent, or develop new services. However, stepping back from ownership also means losing direct influence over KGS’s future direction. The Indian unit will now act more like a client to KGS rather than a joint owner.

This change may also affect internal coordination and decision-making. With the U.S. and U.K. now steering KGS’s direction, there could be shifts in leadership, management style, and even service priorities. Although current operations are anticipated to stay steady, adjustments in workflow and reporting frameworks might develop over time.

India’s Importance in KPMG’s Future

Despite giving up ownership in KGS, India remains a core part of KPMG’s global strategy. The country continues to attract investment due to its strong workforce, technology ecosystem, and cost advantages. KPMG has already announced plans to increase hiring, open more offices, and deepen its presence in India.

The acquisition signals that the U.S. and U.K. arms of KPMG see even greater value in India’s potential and want to maximize that by having direct control over operations. With India being central to global delivery, KPMG is expected to expand its training programs, invest in AI and digital services, and modernize its infrastructure across the country.

Plans for a Larger Advisory Merger: Project Himalaya

While the KGS acquisition is major news in itself, KPMG is also working on an even bigger initiative. Referred to as “Project Himalaya,” this internal project aims to merge the advisory divisions of KPMG in the U.S., U.K., and India into one unified global practice.

If this merger materializes, it would bring together over 50,000 employees across these three regions, creating one of the largest advisory teams in the professional services sector. The move would enable the firm to offer more seamless, cross-border consulting and technology services. It would also help KPMG better compete with rivals like Deloitte and Accenture by building deeper expertise and a more integrated approach to problem-solving.

What Lies Ahead

This acquisition signifies a pivotal shift in KPMG’s approach to its global service delivery framework. With tighter control over KGS and a potential advisory merger on the horizon, the firm is clearly preparing itself for the next decade of professional services – one where speed, efficiency, and innovation will be more important than ever.

KPMG’s bet on India remains strong. The country will continue to be a powerhouse for the firm’s support functions and future innovations. The ownership changes are less about reducing India’s role and more about aligning it more tightly with international strategy.

The image added is for representation purposes only