EDS, SABRE SIGN MULTIBILLION-DOLLAR DEAL
EDS, the information technology giant, has acquired Sabre's airline infrastructure outsourcing business for $670 million. Sabre also awarded EDS a 10-year $2.2-billion service contract to manage Sabre's IT system.
The companies also agreed to jointly market their IT systems and services to the transportation and travel industry.
With the deal, EDS also becomes the largest provider of global IT infrastructure services to the airline industry. EDS, whose clients already include Continental, AeroMexico, Mexicana, British Airways, Virgin Atlantic and America West, adds Sabre clients American Airlines and US Airways.
Sabre will continue to focus on its travel distribution, marketing services and software products, and will expand its research and development under the deal, EDS said.
About 4,200 Sabre employees, mostly U.S.-based, will also transition to EDS, the company said. Sabre has about 10,000 employees worldwide.
The deal is subject to government approvals and is expected to close by mid-year, EDS said.
“This transaction is a substantial win for EDS shareholders. It capitalizes on our global IT infrastructure scale and strengthens EDS's position in an industry in which IT spending is estimated at $9 billion to $10 billion this year,” said Dick Brown, EDS chairman and chief executive officer.”
EDS, the Plano, Texas-based public company, reported $19.2 billion in revenue in 2000.
“We will focus on our resources and investments on the high growth areas of travel marketing and distribution and software products,” said William Hannigan, chairman, president and CEO of Sabre.
Sabre's 2000 revenue were $2.6 billion. The airline industry IT pioneer has a 70-percent interest in travelocity.com.