Wipro and METRO AG sign strategic digital and IT deal worth $700 million
Wipro Limited on Tuesday signed a $700 million strategic digital and IT partnership deal with METRO AG under which around 1,300 employees of Metro AG across Germany, Romania and India will move to the Indian IT major, Wipro
Wipro Limited on Tuesday signed a $700 million strategic digital and IT partnership deal with METRO AG under which around 1,300 employees of Metro AG across Germany, Romania and India will move to the Indian IT major, Wipro.
The estimated deal value for the duration of the first 5 years is approximately $700 million. With the intention to extend up to 4 additional years, it can be a potential spend of up to $1 billion.
In a regulatory filing Wipro said, "As a part of this transaction, Wipro will take over the IT units of METRO AG — METRO-NOM GMBH in Germany and METRO Systems Romania S.R.L. Through this partnership, more than 1,300 employees across Germany, Romania and India will transfer to Wipro, providing them with new opportunities to advance their careers, access innovation, work with leading digital technologies and adopt new ways of working that enable agility, speed and scale in engineering."
Under the deal, Wipro will deliver a complete technology, engineering and solutions transformation program for METRO as it positions itself as a Wholesale 360-degree provider in the hotel, restaurant and catering food industry fuelled by quality, focus and flexibility. Wipro's transformation program will encompass cloud, data center services, workplace and network services, along with application development and operations to provide an integrated, flexible and robust digital infrastructure to help drive METRO's transformation agenda.
Timo Salzsieder, CIO, METRO AG said, "We are at a stage where we want to focus on the activities that are going to give us the strongest possible competitive advantage and to do that, we need to be confident in the digital infrastructure that underpins our growth." He added, "Partnering with Wipro allows us to simplify and streamline our IT landscape, and critically gives us access to innovation and the best digital practices. The Metronomians who are transferring across to Wipro are going to have access to leading-edge innovations that will accelerate their careers. I look forward to the continued close collaboration and partnership with the Metronomians who will continue to support our IT needs in 25 METRO countries."
At the heart of the partnership is the formation of a joint Transformation Office and Innovation Council that will guide the businesses through the transformation and ensure collaborative innovation throughout the partnership.
Thierry Delaporte, Chief Executive Officer and Managing Director, Wipro Limited said, "Like us, METRO AG is focused on leveraging digital transformation for competitive advantage. Wipro's role is to make that transformation efficient and effective. Equally important for us is welcoming 1,300 new colleagues to Wipro and ensuring this move is positive and empowering for each of them." He further added, "Wipro and METRO share a great deal in terms of culture and values, which has guided our discussions throughout and led to the formation of the joint Transformation and Co-Innovation Council. Our relationship with the METRO is a significant and strategic partnership."
Besides, Wipro also has plans to launch a Digital Innovation Hub in Düsseldorf, Germany to support METRO and other clients in the region. The proposed Digital Innovation Hub will serve as Wipro's flagship centre in Europe and enable organisations to cross skill and upskill, besides supporting talent development in local communities.
The Digital Innovation Hub will aim to galvanise adoption of new skills and technologies by companies to innovate and reimagine their products and services, improve operational efficiencies, and drive customer and employee delight, thereby transforming their ability to compete and thrive in the market.
The takeover is subject to customary closing conditions and regulatory approvals and is expected to close on or before April 30, 2021. The transaction was assisted by the global strategy consulting firm EY-Parthenon.
Wipro is a leading global information technology, consulting and business process services company. It is recognized globally for its comprehensive portfolio of services, a strong commitment to sustainability and good corporate citizenship, we have over 180,000 dedicated employees serving clients across six continents.
METRO is a leading international wholesale company with food and non-food assortments that specialises on serving the needs of hotels, restaurants and caterers (HoReCa) as well as independent traders. METRO has been listed in the Dow Jones Sustainability Index for 7 consecutive years. The company operates in 34 countries and employs more than 97,000 people worldwide. In the financial year 2019/20, METRO generated sales of €25.6 billion.