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MarketScreener Homepage  >  Equities  >  Xetra  >  Deutsche Telekom AG    DTE   DE0005557508

DEUTSCHE TELEKOM AG

(DTE)
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IBM, T-Systems scrap mainframe venture after German criticism

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06/07/2019 | 08:32am EDT
A man stands near an IBM logo at the Mobile World Congress in Barcelona

FRANKFURT (Reuters) - IBM has withdrawn an application for anti-trust approval for a mainframe computing venture with T-Systems, the IT services arm of Deutsche Telekom, after the German cartel office made a critical initial assessment of the plan.

Pulling the deal marks a setback for T-Systems CEO Adel Al-Saleh, who since being hired at he start of 2018 has reduced staff, closed offices and sought to hive off business lines that are not expected to generate profitable growth.

"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," said Cartel Office chief Andreas Mundt in a statement on Friday.

The firms said in January they would team up to provide computing services at on-site servers, a traditional strength of IBM that has been challenged in recent years by the explosion of 'cloud' computing hosted at remote datacenters.

The companies did not disclose terms, but reports at the time said IBM would pay 860 million euros ($962 million) to T-Systems as part of the deal to take on the business that employs 400 staff.

Al-Saleh of T-Systems said IBM's withdrawal of its filing to the cartel office was by mutual agreement and he would explore further options.

"The mainframe services partnership with IBM would have been beneficial for all parties," he said in a statement. "Given the Federal Cartel Office position, we have decided to pursue other alternatives to drive value to our clients."

Al-Saleh added that mainframes would continue to be an important part of the T-Systems portfolio. "We are exploring other alternatives how we get latest technology and solutions to our clients."

No comment was immediately available from IBM.

(Reporting by Douglas Busvine, Editing by Mark Potter)


Stocks mentioned in the article
ChangeLast1st jan.
DEUTSCHE TELEKOM AG 0.30% 13.465 Delayed Quote.-7.58%
INTERNATIONAL BUSINESS MACHINES CORPORATION 0.21% 116 Delayed Quote.-13.46%
ONE STOP SYSTEMS, INC. 1.72% 2.37 Delayed Quote.17.33%
TEAM, INC. 2.93% 5.97 Delayed Quote.-62.62%
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Financials
Sales 2020 99 796 M 118 B 118 B
Net income 2020 3 994 M 4 726 M 4 726 M
Net Debt 2020 118 B 140 B 140 B
P/E ratio 2020 16,8x
Yield 2020 4,47%
Capitalization 63 864 M 75 596 M 75 573 M
EV / Sales 2020 1,83x
EV / Sales 2021 1,65x
Nbr of Employees 229 170
Free-Float 67,7%
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Number of Analysts 27
Average target price 18,70 €
Last Close Price 13,47 €
Spread / Highest target 82,0%
Spread / Average Target 38,9%
Spread / Lowest Target 11,4%
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Timotheus Höttges Chief Executive Officer
Ulrich Lehner Chairman-Supervisory Board
Christian P. Illek Chief Financial Officer
Claudia Nemat Head-Technology & Innovation
Lothar Schröder Vice Chairman-Supervisory Board
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