IBM is acquiring T-Systems' mainframe services business from Deutsche Telekom for roughly $986 million, according to the Handelsblatt and IT-Zoom.
Roughly 400 T-Systems employees across six countries will transition to IBM in May 2019 as part of the deal, according to the reports. The mainframe unit is only one small piece of the larger T-Systems -- a German global IT services and consulting company headquartered in Frankfurt. Founded in 2000, T-Systems is a subsidiary of Deutsche Telekom.
Neither IBM nor T-Systems have publicly confirmed the mainframe unit deal price, but T-Systems seemed to confirm that some sort of deal or deeper relationship with IBM will surface in May, according to Reuters.
IBM, T-Systems: Two Companies In Transition
The apparent deal comes at a key time for all parties.
IBM is taking multiple steps to improve profit margins while striving to accelerate revenue growth. For instance, the company is:
- Shedding non-strategic businesses like its classic Lotus Notes, Domino and Tivoli software units along with a mortgage servicing business.
- Acquiring Red Hat for a lofty $34 billion in a bid to offer software, consulting and management services across on-premises, hybrid and public cloud systems.
- Maintaining classic, high-margin businesses like its core mainframe operations.
T-Systems CEO Adel Al-Saleh has announced plans to shed thousands of jobs while targeting a return to profitability within three years.
