India’s largest IT services firm is making an acquisition at a price that isn’t enough to even buy a Starbucks coffee.
On Monday (Nov. 9), Tata Consultancy Services (TCS) agreed to acquire Postbank Systems (PBS), the technology services unit of Deutsche Bank for one euro ($1.18 or Rs88). With this deal, TCS will salvage around 1,500 jobs, which would have been trimmed as part of Deutsche Bank’s restructuring announced last July.
TCS, which first entered Germany in 1990, lists Deutsche Bank among its 100 clients in the country. Now, the company ranks as the fastest-growing IT service provider in Germany. The PBS acquisition will strengthen TCS’s position in the German market and would add $310 million to revenue in 2021, investment bank and financial services company Macquarie said.
“We are pleased to deepen our long-standing partnership with Deutsche Bank, continue to help accelerate their digital transformation, and to acquire market specific capabilities in the banking domain,” N.G. Subramaniam, chief operating officer and executive director for TCS, said in a press release.
The acquisition is reminiscent of 2008, when TCS bought the India-based captive business processing outsourcing (BPO) arm of Citi for over $500 million.
The PBS transaction is expected to close by the end of this year, subject to both parties finalising further agreements as well as customary regulatory and governmental approvals.