Information Technology & Software Giant Infosys recently announced that its consulting arm will pick 75 per cent stake in Stater NV, a wholly-owned subsidiary of ABN Amro Bank NV that offers mortgage administration services in the Netherlands, Belgium and Germany, for €127.5 million (₹990 crore) in an all-cash deal.
ABN Amro, which is the third-largest bank in the Netherlands, will continue to hold the remaining 25 per cent of the shareholding, according to a press statement from Infosys.
Infosys Consulting Pte Ltd is the consulting arm of the IT major. The strategic partnership is in tune with Infosys’ strategy of strengthening its mortgage servicing capabilities in Continental Europe, the statement said.
Stater is a market leader in the Benelux region, operating across the mortgage and consumer lending value chain with capabilities in digital origination, servicing and collection.
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Mortgage services is a focus area for large corporations in the financial sector, given the importance of the asset on a bank’s balance sheet. In a regulatory filing, Infosys said it will have the rights of a majority shareholder as part of the terms of the shareholders’ agreement.
This includes the right to appoint majority of directors in the supervisory board, right to subscribe to new shares and the right of first refusal in the event of transfer of shares.
“This transaction strengthens our approach to offer clients digital platforms and industry-focussed solutions. It brings together our complementary capabilities to enhance the value we offer to our financial services clients,” Mohit Joshi, President, Infosys, said in a press statement.
“While mortgages are a key product for ABN Amro, providing administrative mortgage services is not a core activity. That’s why we are very pleased with Infosys as Stater’s new majority shareholder,” Christian Bornfeld, Member of the Executive Board of ABN Amro, said.
The transaction is expected to close during the first quarter of fiscal 2020, subject to customary closing conditions.
There is a lot to learn here – how to take a large organization forward into its future without necessarily alienating its core. All the right moves I say !