Swedish automobile maker Volvo has agreed to divest its external IT business and outsource its IT infrastructure operations to HCL Technologies. The transaction is part of an efficiency programme announced previously, which aims to reduce the group’s structural costs.
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HCL Technologies will acquire Volvo’s external IT business relating to the provision of IT infrastructure, mainframe services and application operation services for US$138 million. In addition, it has signed a letter of intent with Volvo for a five-year outsourcing engagement for its IT infrastructure and operations services.
Approximately 2,600 Volvo employees globally will be affected by the transaction. The company says they will be given a choice to move to HCL Technologies and will continue to work closely with their colleagues in Volvo’s IT services division.
HCL Technologies is a global IT company with headquarters in Noida. It offers services such as IT consulting, remote infrastructure management, engineering, research and development, software-driven solutions and business process outsourcing.
The deal is expected to close in the second quarter of 2016.
Khaitan & Co, led by partner Joyjyoti Misra with support from senior associate Shruti Singh and associate Sanchit Agarwal, advised HCL technologies.
Greenberg Traurig represented Volvo.
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