The US tech giant said it was offering 750 rupees (16.30 dollars) a share and expected 35,000 shareholders, including Digital Globalsoft employees, to be eligible.

"Software development was done both by HP and Digital Globalsoft in India. There is a conflict and the merger will resolve this," Hans Lidforss, Hewlett-Packard's vice president of strategy and corporate development, said by videoconference to reporters in India's technology hub Bangalore.

Hewlett-Packard employs about 5,000 professionals in India while Digital Globalsoft has 4,600 software engineers.

Public shareholders currently own 29 percent of Digital Globalsoft.

Lidforss said the proposal presented a "great opportunity" for the firm to increase its presence in India.

"India is a very important market both internally and in a global perspective," he said.

Som Mittal, chief of Digital Globalsoft, said his firm would convene a special meeting of the board of directors in the third week of January to approve the proposal.

"The price offered by HP to the shareholders gives them a fair opportunity to exit the company," Mittal said, adding the new management structure would be decided later.

SPACE.WIRE