Sunday, 30 May 2010

AT&T to sell Sterling Commerce to IBM for $1.4 billion

T&T Inc. on Monday said it will sell its business-software division, Sterling Commerce, to IBM for about $1.4 billion in cash.

Dublin, Ohio-based Sterling makes technology that helps companies do business with other companies. Its "business-to-business" software is used to automate processes such as the purchase of raw materials or the replenishment of depleted inventory. About 80% of the Fortune 500 companies are clients.

AT&T's forerunner company, SBC Communications, bought Sterling at the height of the dot-com bubble in 2000 for $3.9 billion in stock. That puts the sale price to IBM 64% lower compared to what AT&T .

The two companies expect the deal to be completed in the second half of the year, with 2,500 Sterling employees to be transferred to IBM . The Sterling unit will be "integrated" into IBM's WebSphere organization in the parent company's software group.

AT&T said it plans to record a onetime pretax gain of $750 million in the quarter in which the sale is completed.

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