Avnet Sells Its IT Business to Tech Data For £2bn

US electronics distributor Avnet is planning to sell its IT business to competitor Tech Data, a distributor of technology products, for $2.6 billion (£2bn).

When the transaction closes in the first half of 2017 it will give Avnet a significant boost in revenue, while Tech Data will gain access to an IT business with an Asia-Pacific presence, allowing it to expand its reach beyond the 100 countries it currently operates in.

IT distribution

While many technology companies are establishing direct relationships with their customers, Tech Data still remains a major player in the middle-man distributor world.

This is partly due to its scope, notably in Europe, and its ability to offer a large range of services, with products from the likes of Apple and Microsoft, through to data centre services. The deal to snap up Avnet’s IT business will likely only build upon this reach and the number of products and added services it can offer, though it is not likely to evolve the company from its core distribution model.

“This combination complements our value-added distribution capabilities in Europe and the Americas, while establishing Tech Data’s presence in Asia-Pacific, which will be a new market for us,” said Bob Dutkowsky, chief executive officer at Tech Data.

“As a result of the enhanced value proposition created through this transaction, Tech Data will be even better positioned to capture opportunities in next-generation technologies, deliver differentiated value to our customers and vendor partners, support career development for our employees, and generate strong returns for our shareholders.”

Avnet on the other hand has struggled with its IT business and by selling the division to a company it competes with, it has the potential to focus on other areas of its business, namely digital platforms, embedded systems and products and services for the Internet of Things.

Shedding the IT business will also give Avnet the ability to optimize its design and supply chains as well as invest in other areas of its business.

Corporate splits and division divestiture seems to be the done thing at the moment with Samsung selling its printer division to HP, and Intel separating its security division into a separate company under the McAfee brand.

One of the biggest recent corporate restructure has been with Google and Alphabet. But how much do you know about Google, and its parent company Alphabet? Answer these 15 questions to find out!