We have relaunched: What's new at ZDNet Asia?

Infosys, Capgemini merger is unlikely, says analyst

Summary

The likelihood that Indian services provider Infosys will buy the consulting firm is "close to zero", says a Technology Business Research analyst.

Events

Microsoft MSDN/Developer Event
25 Mar 2010

One Marina Boulevard, Microsoft Singapore

IT Architect Regional Conference Singapore 2010
20 - 21 Apr 2010

Singapore Management University, Singapore

The Internet Show 2010
21-22 Apr 2010

Suntec Singapore

An analyst has dismissed the possibility that Indian IT services giant Infosys Technologies is considering an acquisition bid for consulting firm Capgemini.

Rumors have been swirling over a potential merger between the two companies, driving Capgemini's shares up by some 6 percent last week. When contacted by ZDNet Asia, a company spokesperson from Infosys said: "We do not comment on market rumors."

While some market observers have hailed the union as plausible, Michael R. Guilbault from Technology Business Research (TBR) has dismissed the possibility.

A senior analyst for TBR's professional services business quarterly group, Guilbault said Monday in a research note: "The likelihood that Infosys is going to purchase Capgemini is close to zero in our view."

A merger of this size, he explained, would be far too big for a company that has been focusing on organic growth since 2003, when it acquired Australia's Expert Information Systems in December.

"Infosys lags behind rivals Wipro and TCS in making strategic acquisitions to build vertical and business line expertise. The Expert acquisition was primarily a geographic buy," he said.

"We think Infosys should pursue acquisitions more aggressively in order to strengthen its international presence and gain local knowledge, but we don't think it should or would dive into a purchase as big as Capgemini," Guilbault said, noting that the IT services company is unlikely to be involved in acquisition deals above US$1 billion.

He added that Infosys treasures its corporate culture and is fearful of diluting this asset, resulting in some of the company's hesitation to grow through acquisitions. Recent history in the professional services industry indicate that integrating consultancies into the host company is one of the most challenging kinds of merger, he noted.

"Infosys isn't going to buy a bear and have to transform it into a gazelle; they'd rather just keep feeding the gazelle," Guilbault said. "[Its] management would like to avoid buying large companies that don't have models as streamlined and functional as it has."

He added that the company's top executives have often underscored Infosys's strategy to focus on growing organically because they believe they "have it 'right'".

Talkback

Add your opinion

In order to post a comment, you need to be registered. (Sign In or register below)

Post your comment
Transform your business interactions with real-time voice, video and telepresence solutions.
Tech Vendor: Cisco

ZDNet Asia Live

Reasons to care about Viacom v. Google - Zd Net Asia.com: Last Thursday's 200-page dump of cour... http://bit.ly/crqRzF #SME #UMG #WMG #EMI

2 hours 39 minutes ago by metaphysicalist on topsy

@BarackObama People voted you in for change. Why are you not listening on ACTA http://tinyurl.com/y8u56g9 #hcr HCR

3 hours 50 minutes ago by studio1411 on topsy

MB Kabbalah IChing - Free Software Downloads - ZDNet Asia: MB Kabbalah IChing is a zodiac sign based software that... http://bit.ly/czUQRr

4 hours 43 minutes ago by fighting_jew on topsy

Found this great little deal calculator http://www.zdnetasia.com/downloa...

12 hours 4 minutes ago by winstoncranford on topsy

Read my blog post on getting the most from your Nexus One: http://www.zdnetasia.com/blogs/m...

RT @3wconsulting: Whitepaper from http://3W.com.au "Outsourcing Your IT Requirements to Philippines" now on @zdnetaustralia & @zdnetasia http://ow.ly/1oY9f

Whitepaper from http://3W.com.au "Outsourcing Your IT Requirements to Philippines" now on @zdnetaustralia & @zdnetasia http://ow.ly/1oYbA

Whitepaper from http://3W.com.au "Outsourcing Your IT Requirements to Philippines" now on @zdnetaustralia & @zdnetasia http://ow.ly/1oYbz

Zdnetasia.com Estimated Worth $178,365 USD. Daily Ad Revenue:$244 USD, Daily Views:81,445 Pages... - http://www.haplog.com/www.zdneta...

The receivers don't transmit back to the satellite. Unless there is a phone line attached to the receiver, they don't have any wa...

2 days 2 minutes ago by bessellbrowne on Apple to join the geolocation craze?

whatever little understanding I have we 'll only progress toward end of the world if we use HPCs to lenthen life of human being. Huma...

2 days 8 minutes ago by abhi32002@gmail.com on High computing promises elixir of life

Thanks for the knowledgeable article on SDDs. Allas...when all this reasearch will happen in Indian Universities. Hope the new bill on Fo...

2 days 21 minutes ago by abhi32002@gmail.com on APAC HPC users eye solid-state drives

It was a good article. This brings a good opportunity for Indian IT firms to come up with new solutions in this field. HPC can become a b...

2 days 40 minutes ago by abhi32002@gmail.com on High computing most-wanted job in Asia

COL KR DHARMADHIKARY(RETD) its very late to reply the link, but if it is still alive and looking for opportunity, i would like to know th...

2 days 37 minutes ago by deb021280 on Education takes off in rural India, helped by PCs

High performance computing (HPC) most-wanted job in Asia http://bit.ly/9vFC3i (via @zdnetasia) #singapore

RT @zdnetasia: EMC COO, Pat Gelsinger, on bridging gaps in the organization and its cloud ambitions in Asia. (cont) http://tl.gd/i5jjd

EMC COO, Pat Gelsinger, on bridging gaps in the organization and its cloud ambitions in Asia. http://bit.ly/9etOZW

Asian SMBs need to pay more attention to disaster recovery planning http://bit.ly/bDet08 via @zdnetasia

Asian SMBs need to pay more attention to disaster recovery planning http://bit.ly/bDet08

"YOG should have social media rules, too - Internet - News" http://bit.ly/dn6vjD

2 days 24 minutes ago by socialsentiment on topsy

[TECH] URL Shorteners slow Web redirection. - http://bit.ly/bySnWK @zdnetasia

URL shorteners are great but they can slow web redirection & you pray it would never go down http://bit.ly/bySnWK via @zdnetasia

URL shorteners slow Web redirection. http://bit.ly/bySnWK

Chinese agencies cry foul over Google. http://bit.ly/by6rwV

all of sg's isps have been practising compulsory invisible proxy for all home subscribers at their backend since many years back alre...

4 days 21 minutes ago by melvinchia on Web filters mean bad news for business

it is not to good for china.
Proactol

4 days 6 minutes ago by nathonastle on Chinese ad partners beg Google for information

Very good explanation of JMX

5 days 11 minutes ago by Babith B on Managing applications with JMX

The reaction to a report issued Tuesday by Flurry Analytics managed to completely overlook some interesting news--the Android-based Motorola Droid outsold the original iPhone over the same period of time following their respective launches--to focus instead on the sales numbers for the Nexus One.

5 days 14 minutes ago by lonemavericks on diggs

Another ZTE story....

5 days 16 minutes ago by Moderate Your Greed on Philippines opens bid for final 3G license

We at www.fifosys.com have also seen a growth in IT outsourcing and anticipate it as a growing field.

5 days 49 minutes ago by sarah Jane on Companies' outsourcing spend to increase

I agree with you. The iSiVaL is super portable and TVs can't expand their image size. I recorded a video that might bring some ideas to...

5 days 20 minutes ago by Jesse B Andersen on Buying a projector? Try an LED TV instead

hermm... he deserved it.. he shud not talk abt sensitive things like tat, well, he shud think twice before saying all those things, event...

5 days 58 minutes ago by ... on Facebook user charged in Malaysia

Password manager tools are potential security threat. Criminals who hack into the computer can use the password manager to log onto any s...

5 days 58 minutes ago by ohanae on What defaults should random password generators use?

I've found the cross platform utility unetbootin to be rather handy for this kind of thing as well.

5 days 32 minutes ago by Jim on Use Live USB Creator to install Fedora 12 from a USB stick

Thanks for the article. I think the debug command has an "\" after "C:" it should say w32tm /debug /enable /file:C:\l...

5 days 33 minutes ago by Roger Biefer on Manage time accuracy with W32Tm