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TCS to buy Deutsche Bank’s tech unit for 1 euro – Times of India

MUMBAI: Tata Consultancy Services (TCS), India’s second-most valued company, agreed to acquire the technology services unit of Deutsche Bank for one euro on Monday. The move will save about 9% of the 18,000 jobs placed in jeopardy by the German giant’s decision to restructure operations and restore profitability.
Deutsche’s IT services unit, Postbank Systems, has 1,578 employees, functioning mainly from the German city of Bonn and has a turnover of 555 million euros. Deutsche is already a customer of TCS and the acquisition will add to the Indian company’s scale in Germany and strengthen its growth outlook. Present in Germany since 1991, TCS offers services to more than 100 corporations there.

The Indian company said the transaction is subject to the approval of the European Commission Merger Control as the revenue of Postbank Systems will be over 250 million euros in 2021. It also requires the nod of the German government’s FDI as the target company operates critical infrastructure such as retail banking including ATM networks there.
While Postbank Systems will add to TCS’s acquisition portfolio, its biggest deal, however, remains the $505-million buyout of Citigroup’s back-office unit in 2008. Prior to the Postbank Systems announcement, TCS had acquired BridgePoint, a US-based retirement service consultant, in November 2018.

Deutsche Bank said this transaction “provides clarity to Postbank Systems staff and gives them the opportunity to become part of the success and growth story of TCS”. The German giant will take a hit of 120 million euros as part of the transaction. The Indian company, with revenues of $22 billion and employees of 4.53 lakh, will route the Postbank Systems purchase through its Netherlands subsidiary.

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