Thursday, June 28, 2007

Sidewalk: Infosys to acquire Capgemini?

Capgemini stock in Paris rose 3.7% today on the news that Infosys is considering a bid for Capgemini. The news is widely reported in Indian as well as international media.

If this deal indeed goes through, then it would be the biggest overseas acquisition by an Indian corporate. Capgemini's market cap is about US $10 billion.

Most of the Indian IT services firms are US focused with very little IT consulting revenues. Infosys is no exception. 73% of their US $3 billion+ revenue last year came from US region while Europe constituted only 17.7%. Consulting revenues were only 4.3%. Clearly, Capgemini acquisition would help Infosys move up the IT services value chain and also establish a significant presence in European market.

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