Wipro offers 10% more to buy back shares and signs a $700 million deal with Metro AG – everything that’s driving the IT services stock higher today
Wiprohas announced a share buyback offer worth ₹9,500 crore, with the buyback price fixed at ₹400.
- This is at a premium of 10% when compared to the share price on December 22.
- In addition to this, the IT services giant has also announced a deal with German food services firm Metro AG, valued at $700 million.
AdvertisementIT services giant Wipro has announced a share buyback offer at a 10% premium when compared to the closing price yesterday (December 22). This has already led to a jump in the stock price - Wipro was up by 3% in the first hour of trading today.
There could be a further rally of 10%, given that the market will rush to price in the premium before the buyback offer opens on December 29.
Even before the announcement, the shares of Wipro gained nearly 3% the day before.
Wipro signs $700 million deal with German food services firm Metro AG
In addition to the share buyback, Wipro has also signed a $700 million deal with German company Metro AG. As part of the deal, Wipro will take over the IT operations of Metro AG, a German food services company.
“As a part of the transaction, Wipro will take over the IT units of Metro AG - Metro-Nom - in Germany and Metro Systems in Romania,” said the Bengaluru-based IT firm in a statement.
The deal value for the first five years is worth $700 million, with a potential to go up to $1 billion if extended by another four years.
The takeover is expected to close by April 30, 2021. The transaction was assisted by the global strategy consulting firm EY-Parthenon.
“As part of the deal, 1,300 Metro employees in Germany, Romania and India will be transferred to Wipro, providing them with opportunities to advance their careers, access innovation, work with digital technologies and adopt new ways of working for agility, speed and scale in engineering,” the company further added.
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Wipro buys the IT operations of a German food services firm for $700 million
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