The Bengaluru-based IT behemoth Infosys will be shelling out €127.5 million (close to Rs 1,000 crore) to get hold of 75% stake in the European banking-major ABN Amro's mortgage service arm Stater.
The all-cash deal comes as a part of a joint venture that Infosys is setting up with the bank. As part of the transaction, Infosys Consulting, a subsidiary of Infosys, will acquire 75% stake in Stater from ABN AMRO by way of an acquisition of existing shares. ABN Amro will continue to hold the remaining 25% of the shareholding.
The strategic partnership is in alignment with the Infosys strategy to strengthen its mortgage servicing capabilities in Continental Europe, the company claimed in its BSE filing.
The transaction is expected to close at the end of June 2019, subject to customary closing conditions.
This acquisition wraps the financial year for India's IT services companies, which saw some major acquisitions and deals this year. Last week, engineering behemoth Larsen and Toubro made a hostile bid to acquire 66.41% stake in the Bengaluru-based mid-tier IT services company Mindtree.
Prior to that, in December 2018, Noida-based tech major HCL made an acquisition of select IBM software products for a whopping sum of $1.78 billion (over Rs 12,500 crore), which turned out to be the biggest ever deal an Indian IT company has made.
“This transaction strengthens our approach to offer clients digital platforms and industry-focused solutions. It brings together our complementary capabilities to enhance the
value we offer to our financial services clients. We are excited to welcome Stater’s talented team to the Infosys family, thereby enhancing our presence in Europe,” said Mohit Joshi, President, Infosys.
The deal is aimed at creating differentiated solutions for the mortgage services market.
On the other hand, ABN Amro has decided to sell off the subsidiary as it was not their core business.
“While mortgages are a key product for ABN AMRO, providing administrative mortgage services is not a core activity. That’s why we are very pleased with Infosys as Stater’s new majority shareholder. ABN AMRO will keep a strategic interest of 25% and will continue to be an important client to Stater,” Christian Bornfeld, Member of the Executive Board of ABN Amro said.