(Reuters) – Germany’s Deutsche Bank (DBKGn.DE) has agreed to sell its IT services division Postbank Systems to India’s Tata Consultancy Services (TCS.NS)

The deal is part of Deutsche Bank’s efforts to meet the target of cutting 18,000 jobs that it announced last year to lower costs and return to profitability.

About Deutsche Bank

Deutsche Bank AG is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the New York Stock Exchange and the Frankfurt Stock Exchange.

The bank’s network spans 58 countries with a large presence in Europe, the Americas, and Asia.

About TCS

Tata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT) services and consulting company headquartered in Mumbai, Maharashtra, India.

It is a subsidiary of the Tata Group and operates in 149 locations across 46 countries.

Cost of deal

Deutsche Bank will pay TCS’s integration costs of 120 million euros ($142.69 million) as part of the deal.

Objective

The deal will deepen the relationship between the two organisations as Deutsche Bank is already a TCS client.

This will also add to TCS’ scale in Germany and strengthen its growth outlook.

Postbank Performance

Postbank Systems reported revenue of €530 million for 2019, up a tad from €525 the year before. 

The expected revenue in 2021 will be about €260 million.

Transaction Clearance

The transaction is subject to both parties finalising further agreements, which they intend to do by end-2020.

It is also subject to customary regulatory and governmental approvals.

Comment from TCS

“We are pleased to deepen our long-standing partnership with Deutsche Bank, continue to help accelerate their digital transformation, and to acquire market-specific capabilities in the banking domain,” NG Subramaniam

Comment from Deutsch Bank

“As part of our move to one technology organisation, we are consolidating the IT platform for our retail banking brand Postbank into the Deutsche Bank platform,” Bernd Leukert

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