Friday, 13 July 2007

Infosys to buy Capgemini..not again!

I see that Capgemini shares were up 4% yesterday on the resurfacing of rumours of a E70 bid from Infosys. We give this rumour no more credence now than we did when it originally surfaced. For Infosys to buy Capgemini, and destroy its margins and earnings in the process, would be suicidal.
Infosys' CEO Kris Gopalakrishnan "did not rule out an acquisition in Europe". Indeed neither do I!. But it will not be Capgemini. Much better to choose a much smaller niche player. a player with IPR with associated services drag which will benefit from offshore servicing.
Anyway, Gopalakrishnan should "never say never" and, neither, perhaps, should I!

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