HCL Tech to buy certain IBM software assets for $1.8 billion, shares slump 7%
HCL Tech, IBM agreed to sell $1.8 billion in software assets to India’s HCL Technologies Ltd., part of Big Blue’s effort to focus more on cloud computing. HCL, based in New Delhi, is buying seven businesses focused on markets such as e-commerce and human resources, according to a statement Thursday. The transaction is expected to close by mid-2019. An existing licensing partnership between the two companies will continue for five of the products.
HCL Tech shares plunged as much as 6.8% intraday to Rs 943.10 per share on BSE.
“The time is right to divest these select collaboration, marketing and commerce software assets, which are increasingly delivered as stand-alone products,” said John Kelly, a senior vice president at International Business Machines Corp.
IBM is trying to become a leader in the hybrid cloud market, which combines software and services delivered over the public internet with similar offerings run on companies’ own servers and data centers. In October, the Armonk, New York-based company agreed to buy Red Hat Inc., a specialist in this area, for $33 billion.