Tech major Cognizant on Thursday announced the acquisition of Munich, Germany-based ESG Mobility, a digital automotive engineering R&D provider for connected, autonomous and electric vehicles. On completion of the acquisition, nearly 1,000 engineering R and D specialists will join Cognizant in the automotive innovation hubs of Germany, the US and China, the IT company said in a statement.
Cognizant and ESG Mobility together will provide engineering services to eight of the world's top 10 automotive original equipment manufacturers (OEM). The acquisition would extend Cognizant's capabilities in digital automotive engineering R&D including in smart, connected mobility, the statement said but did not reveal the financial details of the transaction.
As per available estimates, the globally connected car market which was valued at about $63 billion in 2019, is projected to surpass $225 billion by 2027. ESG Mobility is a wholly-owned subsidiary of ESG Elektroniksystem – and Logistik – GmbH, a privately-held technology consultancy for the design, integration and operation of complex, security-related electronics and IT systems. ESG Mobility provides services across the automotive software stack with keystrengths in electrical and electronic systems andconnected vehicle applications, as well as emerging capabilities for autonomous and electric vehicles.
"Acquiring ESG Mobility will expand Cognizant's automotive engineering expertise, particularly in connected vehicles," Cognizant statement said. Among the growth, drivers are the European Commission's Third Mobility Package, which requires the development of safe, clean, connected cars and autonomous and electric vehicles, as well as all new vehicles to be connected to the internet by 2022.
Commenting on the acquisition, Malcolm Frank, President of Digital Business and Technology, Cognizant said that the automotive industry is undergoing a fundamental shift, embracing new mobility concepts that rely heavily on software, connectivity and artificial intelligence. "Our priority is providing clients with the capabilities they need to compete as modern digital businesses, and ESG Mobility is a natural complement to our existing connected mobility offerings and global delivery model," Frank added.
The transaction is expected to close in the second quarter of 2021, subject to the completion of closing conditions. On completion, ESG Mobility employees will become part of Cognizant's Internet of Things (IoT) and Engineering Services Practice.It is pertinent to mention here that ESG Mobility transaction marks Cognizant's fourth acquisition in 2021, and 13th acquisition since January 2020, further expanding its capabilities in key digital focus areas such as cloud, data and artificial intelligence, digital engineering and Internet of Things (IoT).