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Finnish IT services company Tieto is acquiring Evry in neighbouring Nordic country Norway for about £1.2bn.
The merged company will become known as TietoEvry and will have a total of 24,000 staff and sales of about €3bn a year.
The coming together arrives as Indian IT services companies expand their footprints and customer bases across the Nordic region.
Tieto CEO Kimmo Alkio said the new company would be in a strong position to benefit from the digital transformation being seen across the Nordic region and would invest in capabilities in technologies such as robotics, cloud and artificial intelligence (AI).
A recent report from Tieto found that over 80% of senior executives in Nordic organisations believe the most significant digital transformations are still to come.
Around 85% expect to change business or operational models over the next two years, an indicator that digital transformation remains at the early stage for most Nordic organisations.
While social networking and data analytics are rated as the most important technologies to fuel business transformation, AI technology is one of the strategic priorities for most companies and industries.
Tieto’s Alkio said staff of both companies would have good career opportunities.
“We have a strong foundation based on Nordic values with utmost respect for every individual and focus on life-long learning,” he said. “We will create exciting opportunities for professional and personal growth for employees in both companies – and a strong value proposition for our customers. I foresee a very exciting journey ahead.”
Evry CEO Per Hove said the two companies shared strong Nordic values promoting openness, trust and diversity. “I believe the new company will attract the right competence, customers and partners,” he added.
One source said the acquisition came as no surprise, adding that the companies had been thinking about it for years.
This has finally happened amid stiff competition in the Nordic region from India-based IT services firms that have established operations in the Nordic countries.
“Tieto’s acquisition of Evry shows that the Nordic IT services market is consolidating,” said Peter Schumacher, CEO of management consultancy The Value Leadership Group.
Read more articles about Tieto and Evry
- Sweden’s state-owned alcohol retailer Systembolaget is investing further in its digitisation through a five-year agreement with Norwegian IT services provider Evry.
- Tieto is cutting costs as part of its growth plan that will see hundreds of job cuts in Finland and Sweden.
- Norwegian IT supplier Evry has announced up to 550 job cuts as part of a restructuring programme to boost its ability to compete in the Nordic market.
- Tieto, which supplies IT technology and services in the Nordics, rolls out cloud-based HR services to gain an edge in recruiting.
“Nordic IT services firms are facing increasing competitive pressure from India-based firms which have succeeded in establishing a powerful presence in the Nordics and continue to show superior growth rates and deliver better customer satisfaction.
“While the combined entity will become the largest IT services firm in the Nordics, it remains to be seen if it will be able to win back customer support, improve operational performance and prevent India-based rivals from continuing to expand,” he added.
Separately, Tieto recently announced a reorganisation strategy aimed at reducing the company’s operating cost by €35m. The company is hoping to conclude the first phase of its redundancy plan during the final quarter of this year.
The group reorganisation strategy will lead Tieto into the next phase of its transformation, said group CEO Kimmo Alkio when it was announced. “Unfortunately, the plan requires personnel reductions. These are never easy, but they are necessary to ensure our long-term competitiveness. Our new strategy builds on our renewal as a company. We see exciting opportunities in the world fuelled by data and driven by technology.”