HPE's Communications Technology Group to transition to HCLTech in $225 Million deal

IT giant HCLTech announced on May 23 that it plans to acquire certain assets of Hewlett Packard Enterprise’s (HPE) Communications Technology Group (CTG) for $225 million, approximately ₹1,874 crore, in an all-cash transaction, as per an exchange filing.

According to a joint statement from the companies, around 1,500 employees and 700 contractors experienced in telecom engineering services across various countries—such as Spain, Italy, India, Japan, China, the Americas, and the APAC region—will transition to HCLTech as part of the agreement.

HCLTech stated in a regulatory filing that the deal involves the “purchase of certain assets (CSS) of Communications Technology Group, a business division of Hewlett Packard Enterprise Company”. CSS delivers engineering services to leading global Communications Service Providers (CSPs) leveraging its intellectual properties in a global delivery model" with a total purchase price of $225 million.

This acquisition will bolster HCL Technologies' position in the telecom sector by enhancing its engineering services and utilizing CSS' intellectual property, solutions, and talent at prominent CSPs across Europe, Japan, the Americas, and the APAC region, including 20 of the top 30 CSPs worldwide.

HCLTech CEO and Managing Director C Vijayakumar said, "With this transaction and our planned strategic partnership with HPE, we are strengthening our telecom practice to address the rapidly expanding and transforming global telecom market. With the incoming top engineering talent and industry-leading IP from HPE's CTG group, we are adding significant capabilities and direct relationships with global CSPs."

The transaction is subject to regulatory approvals and other customary closing conditionsand is expected to be finalized within six to nine months.

HPE President and CEO Antonio Neri stated, "In joining HCLTech, our Communications Technology Group will become part of a strong partner that understands and appreciates the significant heritage of our CTG business, its strategy, and its potential for the future."