TCS to acquire Deutsche Bank’s technology unit for one euro

Tata Consultancy Services has agreed to acquire Deutsche Bank’s technology unit, Postbank Systems, for one euro. TCS will buy Postbank Systems through its Netherlands subsidiary.

The transaction is subject to the approval of the European Commission Merger Control. The Indian IT services major also requires approval from the German government’s FDI. This is because of Postbank’s association with Germany’s critical infrastructure like retail banking, ATM networks etc. It is expected to close by December 2020.

TCS has an excellent presence in Europe, specifically in Germany. The Indian company offers services to more than 100 corporations there. Deutsche Bank is already its customer and this acquisition will further scale its presence in Germany.

Postbank provides full range IT services to Deutsche Bank and its other subsidiaries. This includes project management, application management and infrastructure management. As a part of this deal, TCS will acquire 100 per cent of Postbank’s shares. The company’s 1500 employees will also become a part of India’s largest software exporter. This transfer will save about 9 per cent of the 18000 jobs that the German-based bank was planning to cut as a part of its restricting plan. It was reported in May that the investment bank would resume its restructuring plan, centred on cutting 18000 jobs. This plan was introduced last year but was put on hold due to the coronavirus outbreak.

Comments from the companies

“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”, NG Subramaniam, CEO and executive director at TCS, was quoted as saying in the filing. “We welcome Postbank Systems’ IT professionals into the TCS family and invite them to avail the learning and development opportunities here and help script the next chapter of TCS’ growth in Germany”.

“As part of out move to one technology organization, we are consolidating the IT platform for our retail banking brand Postbank into the Deutsche Bank platform”, Bernd Leukert, chief technology, data, and innovation officer at Deutsche Bank, was quoted as saying in the filing. “With this transaction, we agreed on a structure that meets all parties’ interests. It provides clarity to Postbank Systems staff and the opportunity to become part of the success and growth story of TCS”.