HCL Tech To Buy Volvos External IT Business
Swedish commercial vehicles major, Volvo Group, for five years, will also outsource its IT infrastructure operations to HCL Technologies for an undisclosed contract value.
A Letter of Intent is signed between the Volvo Group and HCL. We are just awaiting the signing of the final contract, Volvo Group said in a statement from Stockholm.
In India, HCL Technologies said the company is acquiring from the Volvo Group its external IT business relating to provision of IT infrastructure, mainframe service and application operation services. It will be an all cash consideration of SEK 1.1 billion (USD 138 million).
During the last 12 months, Volvo group derived revenue of SEK 1.6 billion (USD 190 million) from external customers. Approximately 2,600 Volvo personnel all over the world will be affected by the transaction, Volvo said.
Employees will be given the offer to move over to HCL Technologies and will continue to work closely with their colleagues in Volvoâ€™s IT services division.
During the second quarter of 2016, the transaction is to be closed and will provide both cost savings and a capital gain, Volvo said.
As a result of this deal, the Volvo Group’s operating income and net financial debt are expected to see a positive rise by SEK 900 million.
In the afternoon trade, shares of HCL Technologies were trading at Rs 859.50 per scrip, up 0.27 per cent, from the previous close on the BSE.