Deutsche Telekom prepares T-Systems sale

Deutsche Telekom is preparing to sell its troubled IT services unit, T-Systems, Manager Magazin reported on Thursday, citing people familiar with the matter.

The company plans to start talks with interested parties in February, with a deal expected in September, the magazine added.

Business daily Handelsblatt reported separately that Deutsche Telekom was also considering a spin-off of T-Systems, which it has already discussed with the German government, which owns a 30.5% stake of Deutsche Telekom.

In any spin-off, Deutsche Telekom and the German government would each hold a third of T-Systems, while the remaining third would be sold to investors, Handelsblatt said, citing people familiar with the matter.

Deutsche Telekom was not immediately available for comment on the report. A spokesperson for T-Systems said the company had plans for growth but was also looking into other options.

While the telecoms business has been performing well, T-Systems has been underperforming, with incoming orders declining by 25% during the coronavirus crisis.

Last year, Deutsche Telekom’s finance chief Christian Illek said that reduced IT spending by the automotive and airline industries would necessitate additional restructuring at T-Systems on top of an ongoing three-year turnaround plan. Reuters