Infosys not in talks with European Firms

Date: 13-07-2007
Source: Reuters

Indian software services exporter Infosys Technologies Ltd. said speculation it was in talks to buy certain European firms, such as France's Capgemini , was without basis at this point in time.

"The rumour was that we are in discussion with certain large European companies. So I am saying we are not in talks with any of them," Chief Executive S. Gopalakrishnan told Reuters in an interview on Friday.

When asked directly about market speculation that Infosys would bid for Capgemini and that it was interested in buying Deutsche Telekom unit T-Systems, Gopalakrishnan said he could not name individual companies.

"There are some rumours floating around, actually not just one company but multiple companies now ... these rumours are without any basis at this point of time."

Shares in Capgemini, Europe's largest computer consultancy with a market value of $10.7 billion, rose as much as 5 percent on Thursday after traders said Bangalore-based Infosys would make a bid for the European company at 70 euros a share.

At 1144 GMT on Friday, Capgemini shares were down 0.75 percent at 55.79 euros. In Mumbai, Infosys shares ended up 0.96 percent in a market that rose 1.20 percent.

Gopalakrishnan said Nasdaq-listed Infosys was looking for acquisitions in non-English speaking markets such as Germany, France and Japan to accelerate market penetration and get access to new technology services.

"We have also said that, in general, we will look at focused acquisitions, smaller acquisitions ... if there is a good deal on the table we must always evaluate it," he said.

"Given our size, when we say small what we mean is about maybe 2,000 to 5,000 people."

Infosys, India's No.2 software exporter with a market value of $27 billion, designs supply chains and offers back-office services to clients seeking to cut costs. Its customers include ABN AMRO , Goldman Sachs and Airbus .

On Wednesday, Infosys beat forecasts with a 35 percent jump in quarterly profit, boosted by tax gains, but said a rising rupee was squeezing margins in the export-driven company.