Updated: Dimension Data to be gobbled up by Japan's NTT

Japanese telecommunications giant, NTT, has made a multi-billion dollar bid to acquire Dimension Data.

The companies announced they had agreed NTT will acquire all of Dimension Data's shares for up to $3.71 billion (or 286,000 million Japanese yen).

The deal will provide NTT a stronger play into Australia, with the local arm of Dimension Data to be swallowed up by the Japanese giant. It is not clear at this stage what will happen to the staff and assets held locally of both companies.

Globally the tie up will also mean far greater coverage can be realised with NTT operating mainly in Asia, Europe and the USA and DiData - as it is commonly referred to - also having operations in Africa and the Middle East.

In terms of business operations, the deal will also greatly expand NTT's existing offerings that focus on telecommunications, including managed network services, system integration and data centres to include Dimension Data's services that help clients manage their IT infrastructure.

Dimension Data's Australian CEO Steve Nola, said there would be almost no overlap between the companies and that DiData would "continue to operate as a completely independent business, reporting into the highest levels of NTT".

“This announcement is about growth rather than cost cutting and there are no planned operational changes," Nola said in a statement. "It is very much business as usual for Dimension Data and all the subsidiaries of the Dimension Data Australia Group including Express Data and Dimension Data Learning Solutions."

He added local staff had been briefed and client and partner briefings were underway.

“We are delighted that the board of directors of Dimension Data has unanimously agreed to support our offer for Dimension Data," NTT CEO and president, Satoshi Miura, said in a joint statement. "By leveraging the complementary strengths of both companies, we are confident that we will provide end-to-end, global-one-stop and high quality ICT services. Dimension Data and NTT share the common vision to create new services and values to succeed in the coming age of cloud computing."

Dimension Data executive chairman, Jeremy Ord, said he expected the medium and long-term strategy to be now ramped up.

"NTT and Dimension Data have a shared vision of how the market will evolve. The combination of NTT’s global resources and Dimension Data’s system integrator capabilities is an extremely powerful combination,” he said in the statement.

The deal is expected to be completed by the end of October with NTT due to announce the forecast impact on its performance shortly.

This week, Dimension Data secured a $29 million deal with the Department of Defence to provide network hardware maintenance support for its IT systems.

It also announced it had secured what was being billed as one of the largest cloud deals in Australia to date.

The integrator and storage vendor NetApp won a deal to provide storage, backup and recovery services to Victorian IT shared services agency CenITex.

DiData also become the integration services manager for Woolworth’s under a five year contract to manage data services, telephony, security and related infrastructure across Woolworths’ food and grocery, liquor, petrol, general merchandise and consumer electronics retail businesses.

NTT, meanwhile, most recently penned a deal with Australian wireless broadband supplier BigAir (ASX:BGL), which will supply fixed wireless services.

More information to come.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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