HCL Technologies Expands Telecom Presence With Acquisition of HPE's CTG Assets

HCLTech acquires Communications Technology Group (CTG) assets from Hewlett Packard Enterprise (HPE) for $225 million (₹1,874 crore). Around 1,500 CTG employees with telecom expertise will join HCLTech, boosting its service offerings to global Communication Service Providers (CSPs).

HCL Technologies on May 23^rdannounced a strategic move in the global telecom sector by acquiring Communications Technology Group (CTG) assets from Hewlett Packard Enterprise (HPE) for $225 million in an all-cash transaction, approximately equivalent to about ₹1,874 crore in all-cash transactions. This acquisition marks as an expansion for HCLTech, Strengthens its capabilities in technology services and intellectual property (IP) within the telecom industry.

As part of the agreement, around 1,500 employees from CTG with extensive telecommunication skills will join HCLTech across several countries including Spain, Italy, India, Japan, and China. This move is expected to help and enhance HCLTech's service offerings to global Communication Service Providers (CSPs), strengthening its position in key markets including Europe, Japan, the Americas, and the APAC region. Notably, HCLTech also expecting to gain access to top-tier client relationships which will further solidifying its market presence.

C Vijayakumar, CEO and Managing Director of HCL Technologies, expressed optimism about the acquisition, highlighting the addition of top-tier engineering talent and valuable IP assets from CTG. He said that this strategic alignment is poised to capitalize on the evolving global telecom landscape, underscoring HCLTech's commitment to innovation and client-centric solutions.

On the other hand, Hewlett Packard Enterprise will retain the Operations Support Systems (OSS) division of its former CTG business, focusing on areas such as orchestration, assurance, and 5G networking solutions. This realignment will allow HPE to continue providing specialized services to its telco customers and partners.

However, the transaction is subject to regulatory approvals and customary closing conditions, expected to complete within 6 to 9 months. Antonio Neri, President and CEO of HPE, expressed confidence in the transition, emphasize on HCLTech's understanding of CTG's strategic vision and future growth potential.

Post announcement, the shares of HCLTech were trading slightly up at ₹1,354.25 per share on the NSE at 09.57 am.