Wipro on Tuesday said it has signed a USD 700 million-digital and IT partnership deal with Metro AG that will see over 1,300 staff of the German wholesaler move to the Indian IT major.
"The estimated deal value for the duration of the first 5 years is approximately USD 700 million. With the intention to extend up to 4 additional years, it can be a potential spend of up to USD 1 billion," Wipro said in a statement.
As a 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, it added.
"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," it said.
Wipro said it will deliver a complete technology, engineering and solutions transformation programme for Metro as the latter positions itself as a Wholesale 360-degree provider in the hotel, restaurant and catering food industry.
"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," the statement said.
Timo Salzsieder, CIO of Metro AG, said the company is at a stage where it wants to focus on the activities that are going to give it the strongest possible competitive advantage and to do that, it needs to be confident in the digital infrastructure that underpins its 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. The Metronomians who are transferring across to Wipro are going to have access to leading edge innovations that will accelerate their careers," he said.
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.
Thierry Delaporte, Chief Executive Officer and Managing Director of Wipro, said the two companies share a great deal in terms of culture and values. "Our relationship with METRO is a significant and strategic partnership...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," he added.
Wipro had previously announced that it 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 take over is subject to customary closing conditions and regulatory approvals and is expected to close on or before April 30, 2021," the statement said.
The transaction was assisted by the global strategy consulting firm EY-Parthenon.