Indian outsourcing giant Infosys is considering a bid for European IT services giant Capgemini, according to a report in The Times of India.
A deal with Capgemini, which is valued at around £5bn, could help Infosys get a bigger foothold in the European outsourcing and services market, and offer customers access to established local offices. Shares in both companies rose on the news of a possible tie-up.
However, experts cast doubt on a deal taking place. “Even on the scale of IT services takeover rumours, this is a pretty far-fetched one,” said Phil Codling of analyst firm Ovum. “Infosys has been growing at 40 percent-plus and has operating margins at just under 30 percent. The burden of integrating a slower growing, less profitable firm based in another continent and with 75,000 people spread around the world would surely risk stopping this smooth-running machine in its tracks.”
Infosys and Capgemini both declined to comment on the rumours.
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