NEW YORK (TheStreet) -- International Business Machines Corp. (IBM) stock is up 0.40% to $152.01 in pre-market trade after the EU today said it approved the sale of Lufthansa's (DLAKY) IT infrastructure unit to the IT company, Reuters reports.
The unit provides data centers, networks and telephony. "The Commission concluded that the proposed acquisition would not raise competition concerns given the very limited overlaps between the parties' activities and the presence of several strong alternative players that would remain active after the merger," the EU executive said in a statement.
The deal, which was announced on October, will result in a one-off pre-tax charge of 240 million euros ($299 million) for Lufthansa. It will allow Lufthansa to reduce its annual IT costs by around 70 million euros a year, Reuters said.
Under the planned deal, Lufthansa will outsource all its IT infrastructure services to IBM under a seven-year deal and the U.S. firm will take over the airline's IT infrastructure division, currently part of Lufthansa Systems, Reuters noted.
TheStreet Ratings team rates INTL BUSINESS MACHINES CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTL BUSINESS MACHINES CORP (IBM) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and a generally disappointing performance in the stock itself."