IBM In $1 Billion Brazilian Outsourcing Deal With EBX Group

Filed under: International,News,Outsourcing |

IBM has inked a $1 billion, 10-year outsourcing deal and with Brazilian industrial conglomerate EBX Group to run information EBX’s technology operations and invest in its technology division.

EBX Group is a holding company owned by Brazil’s most wealthy individual, Eike Batista.

EBX subsidiaries include mining, an oil and gas provider, a transportation company and SIX Automacao, a technology firm specializing in systems for utilities and commercial marine uses.

IBM agreed to acquire a 20% of Six Automacao and create a new research and development joint venture with the company. In return, EBX Group will pay IBM $1 billion under a 10-year contract to take run its information technology operations.

Eike Batista

Eike Batista, Brazil's richest person.

“Partnering with one of the largest technology companies in the world offers EBX Group a broad portfolio of modern IT solutions,” Batista said in a statement. “IBM, in turn, will expand its presence in one of the most promising markets in the world, working with a group that has a significant presence in strategic sectors.”

Partnering with IBM helps SIX Automacao’s entrance into the industrial technology solutions market, while also establishing joint research and development capabilities for other EBX Group companies.

The agreement also provides EBX Group with access to flexible, large-scale and competitive systems and IT infrastructure to support the company’s rapid. EBX is investing US$15.5 billion between 2011 and 2012 in Brazil, creating 20,000 new jobs.

“This partnership with EBX Group demonstrates IBM’s strength in generating higher value business,” said Ricardo Pelegrini, IBM Brazil general manager. “EBX’s business depth and industry insight opens up significant opportunities to collaborate on growth and new market development in Brazil and beyond.”

Brazil is one of the world’s fastest-growing major economies with an average annual GDP growth rate of more than 5% and is likely to become one of the five largest economies.

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