Lufthansa close to deal with IBM for IT infrastructure unit

German airline Lufthansa is close to a deal to sell its IT infrastructure unit to IBM, including an outsourcing agreement for the services, as part of a shake-up of its technology activities, it said on Wednesday.

Europe's largest airline by revenue is undergoing restructuring and cost-cutting efforts to better position itself to compete with low-cost carriers and Gulf rivals.

It earlier this year said it was seeking a buyer for the unit, which provides data centers, networks and telephony, because it requires a high level of investment and economies of scale, which the airline could not provide.

Under the planned deal, Lufthansa will outsource all of its IT infrastructure services to IBM under a seven-year deal and the US firm will take over the airline's IT infrastructure division, currently part of Lufthansa Systems.

The partnership announcement comes two days after IBM, a company undergoing a stark transition of its own, shocked the markets with lower quarterly results and by suspending its full-year forecasts.

IBM, now largely a computer services supplier, said it suffered a marked slowdown in September as many customers stopped buying new services due in part to macroeconomic concerns but also the rapid pace of changing client demand for the latest technologies delivered as Internet-based services.