India Inc India Inc: Monday, 14 May 2012 12:05

Infosys in the market for French acquisitions

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infosys-logoIndian software services providers have been gradually gaining market share in Europe, despite an overall slowdown in the economy. According to a recent Gartner report, the top five Indian IT services companies, including Tata Consultancy Services (TCS) and Infosys, have increased their market share in Western Europe from 2.3 per cent in 2010 to 2.8 in 2011.

Infosys Technologies, which is sitting on one of the largest cash piles in the industry of about $4 billion, is edging closer to acquisitions in the region.

French companies such as the Sword Group and GFI Informatique have been zeroed in as potential targets for India’s second-largest information technology giant.

A European takeover would help Infosys add a local sales force and new lines of business as well as better compete with multinational IT majors such as Accenture and IBM.

The Western European IT market, the second-largest after North America, hit a lucrative $211 billion last year as it opened up to offshoring services.

Within the region, TCS continued to hold on to its position as the leading IT services provider by bagging a $2.2-billion UK deal from Friends Life in 2011. Wipro also emerged fairly strong despite competition from Infosys, which managed to bag two large deals in Europe.

For 2011-12, Wipro’s IT services revenue from Europe stood at $1.6 billion and accounted for 28.3 per cent of the company’s IT revenue of $5.9 billion – ahead of Infosys’ $1.5 million.

Infosys may also be in danger of losing its No. 2 software provider tag as Cognizant narrows the gap.

Industry-wide, Indian IT services companies are looking to increase their share across Europe by setting up regional offices and appointing country heads as the region offers further potential for growth.

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