iGate said it agreed to pay Rs 503.50 a share for a 63 per cent stake in Patni, valuing the deal at $921 million. It will buy an additional 20.6 per cent stake through an open offer to Patni minority shareholders for $301 million.

The price of Rs 503.50 a share reflects a premium of 9.4 per cent over Patni's closing price on Friday of Rs 460.10.

The stake is being sold by Patni's three founding brothers, who collectively own 45.6 per cent, and private equity firm General Atlantic, which owns 17.4 per cent, iGate said.

Talks to sell a stake in the software services exporter had been going on for about two years. A deal had been expected to be announced a week ago, but was delayed due to valuation gaps with potential buyers, sources had told Reuters.

iGate Chief Executive Phaneesh Murthy said the acquisition, which is expected to close in the first half of this year, would help boost its revenue, customers and service offerings.

Patni shares were up 1.2 per cent at Rs 465.80 at 2.41 pm (0911 GMT) on Monday, in the main Mumbai market down 1.8 per cent.

The acquisition, the biggest in the history of the Indian IT sector, is valued at approximately 1.22 billion dollars. This includes the mandatory open offer to the public share holders of Patni. It is expected to be completed in the first half of 2011.

Nasdaq listed iGATE and its subsidiaries have signed a definitive agreements with the three founders of Patni Computer Systems -- Narendra Patni, Gajendra Patni and Ashok Patni and private equity firm General Atlantic, to acquire their 45.6 per cent and 17.4 per cent stakes, respectively, at a price of Rs 503.50 per share, amounting to a total consideration of approximately 921 million dollars.