Germany’s T-Systems buys VW’s IT services unit

German IT service provider T-Systems International GmbH has moved to expand its geographical coverage and strengthen its expertise in automobile manufacturing and logistics industries with the acquisition of Gedas AG, the computer services subsidiary of Volkswagen AG.

Under a long rumored deal announced Wednesday, VW agreed to sell Gedas to T-Systems for an undisclosed price. The deal is pending approval by the German carmaker’s supervisory board and German antitrust authorities.

The VW group also signed a seven-year IT service contract, worth $3 billion , with T-Systems, a subsidiary of German telco Deutsche Telekom AG.

T-Systems referred to the Gedas acquisition and VW global IT service contract as “milestones” in the company’s path toward internationalization.

Gedas provides a range of information and communications technology services, including consulting, systems integration and network operation, to companies in the manufacturing and logistics sectors. In particular, because of its close relationship with VW, the IT service provider has knowledge of business processes specific to the automotive industry.

In addition to its German headquarters, Gedas has 12 subsidiaries around the world, including Brazil, China, Japan and the U.S. Most of these are located in automobile manufacturing centers. More than two-thirds of Gedas’ 5,500 employees work outside of Germany.

T-Systems provides IT services to about 60 multinationals and 160,000 smaller companies. It also supports Deutsche Telekom’s network infrastructure worldwide.

Earlier this month, DHL Express Vertriebs GmbH & Co. OHG outsourced its IT and network technology to T-Systems. The contract calls for servicing around 8,000 workstations, 500 servers and 50 central applications. T-Systems will also integrate around 300 DHL locations into a common data network.

T-Systems was established a few years ago following the merger of DaimlerChrysler AG’s IT outsourcing unit, Debis Systemhaus GmbH, and the systems integration activities of Deutsche Telekom.