Wipro inks $700-million takeover deal with Metro AG

Our Bureau Bengaluru | Updated on December 22, 2020

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Wipro Ltd on Tuesday said it has signed a $700-million digital and IT partnership deal with Metro AG that will see the IT services company taking over about 1,300 employees of the German wholesaler.

As 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, a press statement from Wipro said.

The estimated deal value for the duration of the first five years is approximately $700 million. With the intention to extend up to four more years, it can be a potential spend of up to $1 billion.

Wipro will deliver a complete technology, engineering and solutions transformation programme 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.

Transformation programme

Wipro’s transformation programme will encompass cloud, data centre 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.

“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. Partnering with Wipro allows us to simplify and streamline our IT landscape, and critically gives us access to innovation and the best digital practices,” said Timo Salzsieder, CIO, METRO AG. “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, the statement said.

‘Competitive advantage’

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.

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.”

Wipro also 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 transaction was assisted by the global strategy consulting firm EY-Parthenon.

Published on December 22, 2020

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