IBM to buy part of Deutsche Telekom’s T-Systems for €860m

16 January 2019 | Alan Burkitt-Gray

Cover

Deutsche Telekom is offloading part of its loss-making T-Systems business to IBM, for a reported €860 million.

Both parties are positioning this as a cooperation agreement, with the two jointly providing mainframe services to the existing customer base.

T-Systems said: “Existing customer contracts remain unaffected. T-Systems will continue to offer mainframe services, but with IBM in the future.”

In September 2018 T-Systems said the unit would lose 10,000 of its then 37,000 staff as CEO Adel Al-Saleh moved the unit away from classic IT outsourcing and into digital and cloud services. Al-Saleh, an American executive, moved to T-Systems to run the company just a year ago.

German business newspaper Handelsblatt is reporting that 400 employees in six countries will switch to IBM in May. It’s not clear whether they are included in the 10,000 marked for redundancy last September.

T-Systems has confirmed to the German competition authority, Bundeskartellamt, that it wants to sell the Frankfurt-based business to IBM.

According to IBM, quoted in IT news site The Register, “IBM and T-Systems plan to enter into a services agreement in the field of mainframe services. Existing customer contracts will remain unaffected. T-Systems will continue to offer mainframe services, but will subsequently provide these services with IBM.”