Deutsche Lufthansa AG nears agreement with IBM for sale of IT infrastructure division
Deutsche Lufthansa AG announced (22-Oct-2014) plans to enter into a long-term IT partnership, with the company to outsource all IT infrastructure services to IBM for an expected seven-year period. IBM is also expected to assume ownership of Lufthansa Systems' infrastructure division. Deutsche Lufthansa AG stated: "The split-up of Lufthansa Systems and formal launch of the new companies are due to take place in the first quarter of 2015. The completion of the Infrastructure sale is planned for March 31, 2015." Lufthansa expects the deal to generate EUR70 million in IT infrastructure cost savings per annum, with an offer submitted and "now subject to final negotiations." Lufthansa expects to incur EUR240 million in one-time charges as a result of the restructuring in FY2014, which will not be recognised in the company's results. IBM is expected to take on all approximately 1400 employees of the division, with the Kelsterbach and Budapest sites to be retained. Deutsche Lufthansa AG stated: "The plan is to split Lufthansa Systems into three companies and to sell the Infrastructure division as part of the outsourcing process. The Airline Solutions and Industry Solutions divisions of the Lufthansa IT subsidiary are to operate as independent companies in their respective markets in the future. The agreements will be subject to the approval of the Lufthansa Supervisory Board and the antitrust authorities. Execution will also require the timely and successful conclusion of the social compensation plan and the reconciliation of interests." Deutsche Lufthansa AG executive board member and CFO Simone Menne said: "The Cooperation with a global and successful IT group like IBM will strengthen the competitiveness of the Group companies and the Lufthansa Group as a whole. It will directly improve our cost base and allows access to the latest IT technologies which we will use to continue digitizing our business processes in order to increase efficiency and customer focus." [more - original PR - English/German] [more - original PR - II - English/German]