IBM buys Telstra, Lend Lease stakes in Global Services Australia - News - Communications

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This story was printed from ZDNet Australia.
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IBM buys Telstra, Lend Lease stakes in Global Services Australia

By Iain Ferguson, 0
August 28, 2003
URL: http://www.zdnet.com.au/news/communications/soa/IBM-buys-Telstra-Lend-Lease-stakes-in-Global-Services-Australia/0,130061791,120277853,00.htm

Big Blue plans to acquire Telstra and Lend Lease's minority shareholdings in IBM Global Services Australia for a combined total of AU$313.5 million, the companies announced today.

IBM and Telstra said in a joint statement the transaction -- which would entail the payment of AU$160 million to Lend Lease and AU$153.5 million to Telstra -- would be concluded by early September, pending an assessment by the Foreign Investment Review Board.

Lend Lease is to be paid its amount in two equal tranches -- one now and in a years' time.

Upon conclusion of the deal, GSA -- described by tech researchers International Data Corp. as the leading provider of services to the Australian marketplace with a 15 percent market share -- is to operate as part of IBM's Global Services organisation.

A joint statement from the companies cited "the changing business priorities of the three companies" as behind the decision.

IBM and Lend Lease originally formed the joint venture, then called ISSC -- Integrated Systems and Services Corporation -- in 1994, with the renaming undertaken when Telstra became a partner in 1997.

Telstra owned a 22.6 percent stake in GSA and Lend Lease a 23 percent share, with Big Blue holding the remaining 54.4 percent.

Lend Lease said in a separate statement it had for a long time viewed the GSA investment as "non-core," with the company's board saying in a statement it was "very pleased" with the outcome of the sale.

Brendon Riley, the head of IBM Australia's Global Services organisation, said in the joint statement that the acquisition would allow the company to simplify its internal structure and processes "and provide more flexible solutions to customers.

"We will integrate our two consulting organisations, BCS (Business Consulting Services) and BIS (Business Innovation Services), making the combined IBM Business Consulting Services the largest business consulting practice in Australia".