Analysts expect that Infosys eyes Capgemini

Date: 11-07-2007
Source: Agence France Presse

Infosys Technologies, India's second-biggest software-maker, said Wednesday it was exploring possible acquisitions but did not say if Paris-based Capgemini was among its targets.

"We do look at possible acquisitions," chief executive officer Kris Gopalakrishnan said at a news conference after unveiling Infosys' first-quarter earnings. Any acquisition has to "meet our criteria," he added, saying a targeted company "should want to be acquired."

The Times of India reported on June 29 that Bangalore-based Infosys will use its cash pile of 62 billion rupees (1.5 billion dollars) to mount a takeover bid for Capgemini, citing industry sources and people close to the matter. "We cannot comment on rumours," Gopalakrishnan said Wednesday, repeating a stand he took when the report surfaced. "Till any acquisition is completed, we cannot comment," he added.

Asked whether Infosys was scouting acquisitions overseas or at home, the chief executive said: "All options are open."

Infosys, which has grown from 500 million dollars in annual sales to more than three billion dollars in five years, is trying to expand in an attempt to sharpen its competitive edge in the global information technology market.

The company, founded 26 years ago by seven software professionals which now employs more than 75,000 people, wants to catch up in the consulting business with bigger information-technology firms such as IBM and Accenture.

Capgemini, which also has declined to comment on the reports, had 10.35 billion dollars in annual sales last year, compared with Infosys' 3.1 billion dollars. But the European firm made half the profit logged by Infosys and commanded less than half its market value of 27 billion dollars.