Capgemini acquisition by Wipro? I will also win that one
A few months ago I’ve already won two packs of beer, since my friend Christophe was betting on the acquisition of Capgemini by Infosys. I won, and I am insisting: Wipro will not buy Capgemini. Let’s do the maths : Wipro market capitalization is USD 20 Billion. Capgemini is around USD 8,5 billions. Most the valuation of Wipro and its Indian counterparts is based on their two digits growth/profitability. Why would Wipro shareholders want to loose value with a top player averaging these magic figures?
Moreover, Capgemini has more than 70.000+ people, with strong position in Europe. India players will try to acquire US IT integrators first. EDS? CSC? Not easy. Their market cap. is around USD 10 billion, and they work a lot for militaries. I would bet on smaller players like Sapient.
There will be 40.000 Capgemini people working in India by 2010. Capgemini will be 100.000+ people strong.The race is just starting. I take that bet. No acquisition of Capgemini in 2008. And Sapient will be Indian by the end of 2009.
A pack of beer?
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Comments
well at the end, shareholders are interested in money… so if someone with deep pockets come by… even if they’re indian 
but i hope that we can still go on independently!
Hi Peter,
I can understand that uncertainty is not very comfortable, but I think that a merger with a major Indian player can bring really good things. One of them is an interesting mix of European IT Professional Services culture with a more Anglo-Saxon one. The first one has the experience of running a PS firm for more than 40 years. We master the fundamentals of that industry. Our Indian colleagues are younger, and more Anglo-Saxons. When it comes to product/professional services mix, to R&D investments, they are much more ambitious than we usually are. It can be a fruitful mix.
Another point that is very often no considered: as Capgemini is, the Indian culture is quite entrepreneurial. Look at TCS: they are in their fifth generation of family stewardship.
Anyway, given the pace at which Capgemini increases its Indian workforce/presence, I still bet that we are discussing of a merger that will not happen anytime soon :-). Indian PS firms growth and profitability must decrease in order for that kind of merger to happen. If not, the deal will be to much dilutive.
I agree, they will not be acquired. If they do I will resign