- General
- June 7, 2019
- 4 minutes read
IBM And T-Systems Abandon Mainframe Deal
IBM CEO Ginni Rometty image: IBM IBM and T-Systems, the IT services arm of German telecom giant Deutsche Telekom, have abandoned…
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| IBM CEO Ginni Rometty
image: IBM
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IBM and T-Systems, the IT services arm of German telecom giant Deutsche Telekom, have abandoned a deal that was meant to see IBM acquire assets in IT services and outsourcing, and mainframe computing from T-Systems for a reported 860 million euros ($962 million) as at the time the deal was announced. This is shortly after Germany’s anti-trust regulator extended its review of the deal by two weeks.
IBM appears to have pulled out from the deal after criticism from Germany’s Federal Cartel Office. “According to our preliminary assessment IBM holds a dominant position here in the European Economic Area which would have been further strengthened by acquiring personnel and essential infrastructure from its competitor, T-Systems,” The country’s Cartel Office chief Andreas Mundt said in a statement on Friday.
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| T-Systems CEO Adel Al-Saleh
image: Deutsche Telekom
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The deal marks a blow for for T-Systems CEO Adel Al-Saleh, who — since taking over last year — has lessened headcount, closed down offices and explored ways to do away with business units that are not expected to generate profitable growth.
In a separate statement, Al-Saleh hinted that T-Systems could be exploring other deals. “The mainframe services partnership with IBM would have been beneficial for all parties,” he said. “Given the Federal Cartel Office position, we have decided to pursue other alternatives to drive value to our clients.”
