India’s largest IT services firm Tata Consultancy Services (TCS) on Monday said it will acquire 100 per cent shares of Postbank Systems AG (PBS) from Deutsche Bank AG.
PBS has been the internal IT provider for Postbank AG, a subsidiary of Deutsche Bank, catering for the German retail banking market. PBS has approximately 1,500 employees across nine locations in Germany.
The transaction will see the employees of PBS become a part of the Mumbai-based company.
In a regulatory filing, TCS said “100 per cent of the shares will be acquired by TCS Netherlands BV (a subsidiary of TCS)” and the “estimated transaction value at a symbolic 1 euro”.
The transaction is subject to both parties finalising further agreements, which they intend to do by end-2020.
Further, the transaction is subject to customary regulatory and governmental approvals.
The deal will further add to TCS’ scale in Germany and strengthen its growth outlook, it said in a statement.
TCS is ranked by analysts as the fastest-growing IT service provider in Germany with a 10-year CAGR of over 24 per cent.
“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,” TCS Chief Operating Officer and Executive Director N G Subramaniam said.
Present in Germany since 1991, TCS currently works with over 100 leading German corporations.
Headquartered in Bonn, Germany, PBS’ services include infrastructure operations, application operations, management and development, as well as business consulting for retail banking. Its revenue in 2019 stood at 530 million euros.
The entity will sell significant assets and pass through contracts to Deutsche Bank, and therefore, the expected revenue in 2021 will be approximately 260 million euros, the filing said.
“As part of our move to one technology organisation, we are consolidating the IT platform for our retail banking brand Postbank into the Deutsche Bank platform,” Deutsche Bank Chief Technology, Data and Innovation Officer Bernd Leukert said.
Leukert added that TCS is already a trusted IT service partner for Deutsche Bank, and this strengthens the relationship further.
“We are confident that TCS is the ideal owner for Postbank Systems. 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,” Leukert said.