Shares of Tata Consultancy Services (TCS) are in focus after announcing the acquisition of Porsche AG’s management and IT consulting subsidiary MHP for $373 million. 

Alongside the acquisition, TCS and Porsche have entered into a five-year strategic partnership worth around $1.4 billion, strengthening TCS’s position in automotive technology, artificial intelligence and manufacturing transformation.

TCS will acquire 100% of MHP Management- und IT-Beratung GmbH through its Netherlands-based subsidiary. The transaction values MHP at an enterprise value of €320 million, or about $373 million, and will be completed through an all-cash transaction, subject to regulatory and competition approvals. The deal is expected to close within three to four months.

MHP is a Germany-based management and IT consultancy with more than 4,500 employees globally. The company specialises in automotive and industrial consulting, digital transformation, artificial intelligence, SAP transformation, manufacturing digitalisation, connected mobility and software-defined mobility.

Importantly, MHP will retain its brand and continue operating as an independent consultancy within the TCS group. Porsche and MHP will also continue their existing relationship, with MHP remaining an important technology and transformation partner for Porsche.

The acquisition is accompanied by a major strategic agreement between TCS and Porsche. The five-year partnership is valued at €1.25 billion, or around $1.45 billion, and will focus on AI-led transformation across Porsche’s engineering, manufacturing, operations, customer experience and enterprise functions.

The partnership is expected to help Porsche accelerate the use of AI, software and data across its operations, while TCS will gain deeper access to automotive expertise and a stronger foothold in the European automotive technology market. 

The companies also plan to develop next-generation automotive technology services and software-defined mobility platforms.

For Porsche, the transaction forms part of its “Sportwagenschmiede 35” strategy, under which the automaker is sharpening its focus on its core sports-car business while seeking to improve profitability and cash flow through 2035. 

Selling MHP allows Porsche to unlock value from a non-core consulting business while maintaining its strategic technology relationship with the company.

For TCS, the acquisition provides an opportunity to expand its capabilities in AI, automotive engineering, manufacturing and consulting-led technology services. The company can also use MHP’s industry expertise to strengthen its offerings to other automotive and industrial customers across Europe.

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