Siemens Business Services GmbH, the IT services arm of Siemens AG, is closing in on a 6.65bn euro ($8.3bn) contract with the German defense ministry according to a report on Dow Jones Newswires.
The report quoted an unnamed source familiar with the matter, as saying that the German company expected to sign the Herkules project sometime this year.
The project, which involves a complete modernization of the department’s information technology infrastructure, has had a long stuttering history, and there could well be further installments in the saga yet.
Bidding for the contract started way back in 2000, and two years later a consortium, named ISIC 21 which was led by Computer Sciences Corp and included German telecoms operator Mobilcom AG and aerospace group EADS NV, was awarded preferred bidder status. ISIC 21 failed to reach an agreement with the German government, with talks breaking down in July 2004.
It now appears that SBS together with IBM (T-Systems was part of the bidding group but pulled out in February last year) could finally close the deal in the next six months.
Speculation that Siemens is looking to dispose of SBS is continuing, as it has for years. Should SBS sign the Herkules deal, it would substantially enhance its valuation, especially as it would coincide with the conclusion of major restructuring.