IBM to buy AT&T arm for $1.4 bn

Technology giant IBM said it will acquire Sterling Commerce from telecom major AT&T in a USD 1.4-billion all-cash deal.

Listen to this article

00:00

1x 1.5x 1.8x

Technology giant IBM said it will acquire Sterling Commerce from telecom major AT&T in a USD 1.4-billion all-cash deal.

The two giants have entered into a definitive agreement for IBM to buyout business-to-business solutions provider Sterling Commerce from AT&T for around USD 1.4 billion in cash,the companies said in a joint statement.

According to IBM,the combined technologies and expertise with Sterling Commerce would make business and partner networks smarter and more efficient by enabling integration beyond the enterprise.

Story continues below this ad

“This acquisition will give IBM new tools to help clients build dynamic business networks that connect partners,suppliers and clients and deliver a consistent customer experience across channels. In addition,the fact that much of this can be done in the cloud will make it compelling to large numbers of our customers,” IBM general manager for WebSphere Craig Hayman said.

The two companies expect the transaction to close in the second half of 2010,subject to regulatory approvals and the satisfaction of other customary closing conditions. Moreover,AT&T expects to record a one-time pre-tax gain of about USD750 million in the quarter in which the deal closes.

At present,Sterling enables over 1 billion business interactions a year for clients in financial services,retail,manufacturing,communications and distribution industries.

Following the acquisition,about 2,500 Sterling employees would be integrated into the WebSphere within IBM’s Software Group,the statement added.