Wipro signs up to $1bn digital transformation deal with METRO AG, acquiring IT units in Germany and Romania

Indian IT services giant Wipro Limited (NSE: WIPRO, BSE: 507685) has announced a major multi-year strategic digital and IT partnership with German wholesaler METRO AG valued at up to $1 billion, marking one of its largest European engagements to date. The deal includes the takeover of METRO’s IT units in Germany and Romania, and the onboarding of more than 1,300 employees into Wipro’s global operations.

The agreement, which spans an initial five-year term with an estimated value of $700 million, has the potential to extend by another four years, taking the total deal value to approximately $1 billion. This transaction significantly deepens Wipro’s presence in continental Europe, particularly in the retail and wholesale food distribution sectors, while giving METRO AG a pathway to accelerate its digital reinvention as a 360-degree wholesale partner for the hospitality and food service industries.

What does the Wipro–METRO AG deal include and how are the IT units being integrated?

Under the partnership, Wipro will absorb METRO-NOM GMBH in Germany and METRO Systems Romania, both of which are part of METRO AG’s core IT operations. The transition involves the transfer of over 1,300 employees across Germany, Romania, and India to Wipro, positioning the Indian IT firm as a critical technology partner for METRO’s global operations.

Wipro has described the transaction as a “comprehensive technology, engineering, and solutions transformation program,” focused on cloud services, data center infrastructure, enterprise network services, workplace digitization, and application development and operations. The overall aim is to deliver an integrated and agile digital infrastructure that supports METRO’s ambition to become the preferred partner for restaurants, hotels, and catering companies across 25 countries.

METRO AG’s Chief Information Officer Timo Salzsieder said the partnership is designed to simplify and streamline METRO’s IT landscape while providing the digital foundation necessary for long-term competitive differentiation. He added that the move not only secures the technological roadmap of METRO but also creates new career growth opportunities for the transitioning employees—referred to internally as “Metronomians.”

Why is this deal strategically significant for Wipro’s European growth ambitions?

This deal represents a landmark in Wipro’s European strategy, as it strengthens its footprint in Germany—Europe’s largest economy—and aligns with Wipro’s broader push to expand its delivery capabilities and customer base in key verticals such as retail, consumer goods, and distribution. With over 1,300 professionals joining Wipro, the acquisition also adds critical domain and industry-specific capabilities to its central and eastern European operations.

Wipro CEO and Managing Director Thierry Delaporte emphasized the cultural and strategic alignment between the two firms. In his statement, he noted that both companies share a common vision of leveraging digital transformation for sustained competitive advantage. He also underscored the importance of integrating incoming talent in a way that is “positive and empowering,” and announced the formation of a joint Transformation and Co-Innovation Council to guide the partnership forward.

This is the first major transaction announced under Delaporte’s leadership since he took over as CEO in July 2020. The deal aligns with his stated focus on large accounts, simplification of internal structures, and deep sector specialization. It also signals Wipro’s increasing appetite for transformational, multi-tower engagements in Europe—particularly those involving asset takeovers and captive acquisitions.

How does this deal position METRO AG in its digital transformation journey?

For METRO AG (ETR: B4B), the deal is part of a broader restructuring and digital acceleration strategy aimed at becoming a tech-enabled, customer-centric wholesaler. The German group has been undergoing a series of portfolio changes over recent years, including the separation from MediaMarktSaturn and the focus on core wholesale operations. In 2020, METRO sharpened its focus on digital ordering platforms, inventory optimization, and end-to-end customer experience enhancements in the food service sector.

By outsourcing its IT infrastructure management to Wipro, METRO aims to enhance its access to global innovation, automate legacy systems, and introduce greater scalability into its IT backbone. The partnership is expected to reduce operational complexity and free up internal resources to focus on strategic business initiatives and core service offerings.

CIO Timo Salzsieder reiterated METRO’s intent to keep its technology operations globally resilient, stating that the partnership “gives us access to innovation and the best digital practices.” He added that the transferred teams would continue supporting METRO’s IT needs across all 25 countries in which it operates.

What does this mean for the IT services industry and captive unit transitions in 2020?

The Wipro–METRO transaction fits into a larger trend of European enterprises divesting captive IT operations to global service providers in pursuit of modernization and cost optimization. As the COVID-19 pandemic continues to reshape digital priorities in retail, hospitality, and food services, many firms are seeking partners to rapidly transition away from on-premise systems and legacy data centers toward cloud-native, service-oriented models.

2020 has seen several such transactions, including large managed services deals and carve-outs in manufacturing and logistics sectors. According to pre-deal estimates from industry analysts, the European IT outsourcing market is expected to grow in the high single digits year-over-year, driven by accelerated demand for cloud migration, application modernization, and enterprise resilience services.

In this context, Wipro’s acquisition of METRO’s IT units is a signal of confidence in the long-term structural shift toward integrated digital infrastructure. With its experience managing similar transitions and its investments in cloud platforms and AI-based automation, Wipro is positioning itself as a go-to partner for European enterprises navigating post-COVID transformation.

What is the institutional and investor reaction to Wipro’s strategic move?

While the Wipro–METRO deal is subject to regulatory approvals in Germany and Romania, early sentiment from institutional investors has been cautiously optimistic. The deal is seen as accretive to revenue over the medium term and consistent with the strategic realignment underway at Wipro under Delaporte’s leadership.

Brokerage reports released in the weeks leading up to the deal’s announcement had already noted Wipro’s active pipeline in Europe, with expectations of deal wins in the $500 million to $1 billion range. The METRO engagement now confirms those expectations and adds immediate scale to Wipro’s European delivery engine.

Analysts tracking Wipro’s performance have pointed to the significance of acquiring existing client infrastructure and talent, as this reduces the lead time to service delivery and builds stickiness into long-term engagements. Moreover, the cultural compatibility emphasized by both firms suggests smoother integration—often a key challenge in such large transitions.

What is the future outlook for digital outsourcing in the European food and hospitality sector?

The European food service distribution and hospitality sectors are undergoing rapid change, with digital commerce, inventory analytics, and contactless delivery systems emerging as core pillars of competitiveness. As METRO AG adapts to these changes through its strategic pivot, its reliance on a robust digital partner becomes essential.

Wipro’s deep capabilities in SAP, cloud-native applications, cybersecurity, and global support operations align with the requirements of this vertical. The Indian IT services provider also has ongoing engagements with several other retail and CPG majors in Europe, which could create cross-selling and platform integration opportunities over time.

As the food and hospitality industry looks to future-proof operations against supply chain shocks and shifting customer behavior, partnerships like Wipro–METRO are expected to become increasingly central to strategic planning.