Is there any substance to buyout rumours of Capgemini?

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French IT and consulting major Capgemini is in the focus once again, on rumours of being bought out by an Indian IT major. CNBC-TV18's Kenan Machado and Harsha Subramaniam find out if there is any fire behind the smoke.

 

Rumour mills do not seem to have enough of Capgemini. This year, the French IT and consulting company has been the object of speculation, regarding a takeover bid by Infosys and more recently Wipro. But with annual sales of exceeding USD 12 billion or roughly three times that of Wipro and Infosy s each, why would the French company seem so vulnerable? Some say it is because Capgemini was slow to adopt the India outsourcing story, compared to its global rivals.

 

Compared to IBM and Accenture , Capgemini only had 9% of its workforce based here before acquisition of US-based outsourcer Kanbay in February.

 

Capgemini says with its base and customers in Europe, it does not need to match its American rivals, who need to cut costs in the US.

 

"It is not that we need to be the largest western employer in India. For us, it is a very large scale, which we will need to continue to drive to, but in proportion to the footprint we have," said Salil Parekh , Executive Chairman, Capgemini India.

 

However, that has not stopped Capgemini from buying scale in India. Capgemini's acquisition of Kanbay added 6,000 employees to its 5,500 strong workforce in India. Another 51% stake in Unilever's BPO added 600 employees. And Capgemini says there is going to be more.

 

"On a global perspective, BPO is an important space to grow in. If we find something that meets our parameters, in specific sectors, doing specific service offers, we will look at that as an acquisition candidate," added Salil Parekh.

 

In the next three years, Capgemini wants to employ 40,000 people in India making up for 40% of its global workforce. That may enable it to fend off any takeover attempts by Indian outsourcers for some time to come. 

 

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