Capgemini denies Consulting Sale Plan

Date: 20-07-2007
Source: Reuters

Capgemini, Europe's largest IT consultancy, said on Thursday that it was not planning to sell its IT consulting activities in financial services and retailing, denying a report in the Indian press. In an internal note sent to staff in India and North America and obtained by Reuters, Chief Executive Paul Hermelin said "rumours had surfaced in the Indian press" that the group may consider selling these activities.

"I strongly deny this as unfounded speculation. Selling such an important activity is out of the question for the Capgemini group and has never been considered," he told staff in the note. In April, Hermelin told Capgemini shareholders that the group's priorities were boosting profitability, expanding in Business Process Outsourcing (BPO) and integrating the purchase of Kanbay International.

The purchase of Kanbay -- finalised in February -- is aimed at accelerating Capgemini's growth in India and at bolstering its position in finance consulting and in North America. Shares in Capgemini rose 4 percent on Thursday after the Times of India reported that Indian software services exporter Infosys Technologies could strike a deal with Capgemini to acquire part of the group's consulting business.

Capgemini and Infosys had both declined to comment on the report on Thursday. Last week Infosys, which has a market capitalisation of
$27.6 billion, said speculation that it was in talks to buy certain European firms, such as Capgemini, was baseless at this point in time.

At 1318 GMT shares in Capgemini, which has a market value of $11.2 billion euros, were up 3.8 percent at 57.03 euros, outperforming the European technology sector, which was up 2.04 percent. Nasdaq-listed Infosys has said it was looking for acquisitions in non-English speaking markets such as Germany, France and Japan to accelerate market penetration.