IBM Strikes $1B Deal With Brazil Mogul Batista

International Business Machines Corp. (NYSE: IBM), the world's No. 2 provider of computing services, won a 10-year, $1 billion contract with interests of Brazilian tycoon Eike Batista.

IBM, along with providing technology services to the natural-resources divisions of Batista's EBX Group, will acquire a 20 percent stake in EBX subsidiary SIX Automacao, which provides technology services to various industries.

Partnering with one of the largest technology companies in the world offers EBX Group a broad portfolio of modern IT solutions. IBM, in turn, will expand its presence in one of the most promising markets in the world, working with a group that has a significant presence in strategic sectors, Batista said.

Ricardo Pelegrini, IBM's general manager for Brazil, said: This partnership with EBX Group demonstrates IBM's strength in generating higher value business. EBX's business depth and industry insight opens up significant opportunities to collaborate on growth and new market development in Brazil and beyond. IBM brings innovation and cutting-edge technology that will contribute to the country's development through our Smarter Planet agenda.

The move is the latest in Brazil for Big Blue, which has been helping Rio de Janeiro implement the company's Smarter Cities automation program ahead of the 2016 Olympics.

Earlier this week, networking-gear maker Cisco Systems Inc. (Nasdaq: CSCO) announced plans to invest $1 billion in Brazil, one of the five so-called BRICS countries (along with Russia, India, China and South Africa), where economic growth currently outpaces that of the developed world.

In last year's fourth quarter, IBM had a 3 percent revenue increase in the Americas compared with 10 percent in BRICS nations. The company's overall quarterly revenue rose 2 percent to $29.5 billion.

Batista's EBX Group already does business in nine Latin American countries, spanning natural resources, offshore oil development, mining and other fast-growing sectors.

IBM, which is based in Armonk, N.Y., established a research center in Rio de Janeiro in 201, its first in Latin America. The company said it plans to employ as many as 100 researchers there.

Batista, 55, the son of a former government minister of mines, amassed his fortune in commodities trading. Last month, he announced plans to sell a stake in EBX for $2 billion to Abu Dhabi's sovereign-wealth fund, Mubadala Development Corp., which also controls semiconductor maker GlobalFoundries.

IBM shares were trading at $204.83, down $1.22, Thursday morning.