India's Tata Consultancy Services (TCS) has agreed to buy Letterkenny, Co Donegal-based Pramerica Systems from insurance giant Prudential Financial, taking on more than 1,500 employees of the company.
IDA Ireland, the State's inward investment agency, welcomed the announcement and highlighted TCS's intention to retain the majority of Pramerica employees and transfer their employment to TCS.
Pramerica, a business and technology solutions provider, will continue to provide a range of services back to Prudential after its ownership changes.
The deal helps Prudential, a New Jersey-headquartered life insurer, to cut costs in its bid to counter low interest rates and the coronavirus fallout. Prudential will separately maintain a presence in Letterkenny to support Prudential Global Investment Management and certain other functions.
Pramerica began its operations in Letterkenny 20 years ago with just eight employees and has been in expansion mode since then.
"In the last two decades, Pramerica has successfully evolved and adapted many times over to become a substantial and significant employer in the North West region," said IDA Ireland chief executive Martin Shanahan.
“This partnership with TCS is another important chapter in this process. TCS is a leading IT services, consulting and business solutions organisation with a global footprint that is committed to providing services out of the Northwest of Ireland and continue its successful 25-year relationship with Prudential.”
Mr Shanahan assured TCS and Prudential of IDA Ireland’s “continued support”.
No cash will change hands as a result of the deal, Bloomberg News reported. The deal deepens the Indian IT giant's relationship with a key client and expands its foothold in Ireland and Europe, said K. Krithivasan, TCS's president of banking, financial services and insurance.
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.
Earlier this week, Deutsche Bank agreed to sell its technology services unit, Postbank Systems, to TCS by the year end for a price of one euro.
TCS 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, BT Group, Panasonic and Qantas.
– Additional reporting: Bloomberg