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TCS acquires Pramerica Technology Services from Prudential Financial

No cash will change hands and TCS will take on more than 1,500 Pramerica employees.

Tata Consultancy Services | TCS | Pramerica

Saritha Rai | Bloomberg  |  New Delhi 


India’s Ltd. agreed to acquire Technology Services from insurance giant Inc., according to a person familiar with the matter, helping the insurer cut costs to counter low interest rates and the coronavirus fallout.

and the Newark, N.J.-based life insurer signed the agreement for the Letterkenny, Ireland-based tech-services business Wednesday, with a few details still being worked out, said the person, asking not to be identified because the deal isn’t public. No cash will change hands and will take on more than 1,500 employees.

declined to comment, while Prudential didn’t respond to requests for comment.

Global banks and insurers are accelerating efforts to shed non-core assets, like tech support, as they navigate through the economic uncertainty of the Covid-19 pandemic. Just this week, Deutsche Bank agreed to sell its technology services unit, Postbank Systems AG, to TCS by the year end. The price: one euro.

The Prudential deal is similar in structure and concept. Shedding the operation is expected to help the insurer trim costs, as it aims for $750 million in savings by the end of 2023. For TCS, will bring multi-year services contracts, strategy expertise and a development center in Ireland, the person said.

Tata Consultancy is Asia’s biggest exporter of software services with a market value of more than $130 billion. It has more than 450,000 employees around the world and generates $22 billion in annual revenue from selling software services and products to a range of customers including Citigroup Inc., BT Group Plc, Panasonic Corp. and Qantas Airways Ltd.

is re-pricing services and moving to products that are less rate-sensitive, the insurer said while announcing quarterly earnings last week. It put share buybacks on pause as the fallout of the coronavirus outbreak clouded business visibility. Chief Executive officer Charles Lowrey said at the time the company would explore potential asset sales and that deal-making would help reshape the business.

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First Published: Thu, November 12 2020. 16:21 IST