AT&T sells off its Sterling Commerce unit to IBM

AT&T's (NYSE: T) decision to sell off its Sterling Commerce unit to IBM (NYSE: IBM) for $1.4 billion is perhaps another realization that the old dot-com hype no longer has the same allure, at least for telcos that existed in the late 1990s.

While the sale will bring in about $750 million gain when the deal closes in the second half of this year, AT&T is selling the unit at a loss. Sterling was originally acquired in 2000 by SBC Communications for $3.9 billion, before the service provider took AT&T's name when it merged with its former parent in 2005.

Sterling is a provider of software that allows businesses to transfer various electronic documents, including purchase orders, company payroll and healthcare claims--activities that are not exactly core to AT&T's business. When the deal closes, about 2,500 Sterling Commerce workers will be integrated into IBM's WebSphere software division.

For IBM, the acquisition is part of its ongoing strategy to refocus its attention on software versus hardware. Along with purchasing Sterling and PwC Consulting, Big Blue sold off its personal computer business to Lenovo in 2005. To expand its software business further, IBM said it plans to spend $20 billion on acquisitions through 2015.

For more:
- see the release here
- Reuters has this article

Related articles:
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