Capgemini acquisition targets overseas growth

Capgemini is buying rival outsourcing company Kanbay International for around $1.25bn (£675m), to help it expand in India and the US.

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Capgemini is buying rival outsourcing company Kanbay International for around $1.25bn (£675m), to help it expand in India and the US.

Capgemini will use Kanbay’s base in the financial sector to expand its operations in India by 89%, based on its latest sales figures. Two of Kanbay’s biggest customers are HSBC and Morgan Stanley.

Raymond Spencer, Kanbay chief executive officer will join “the top management of Capgemini”, said the company, without confirming his title. Kanbay has its headquarters in Chicago, but only 20% of its 6,900 employees are based in the US.

The combined company would have a headcount in India of around 12,000. Capgemini added that the acquisition would also expand its presence in the North America market.

Ovum analyst Douglas Hayward said, “This is a clever move for several reasons. Kanbay's presence in financial services and in the US are two areas where Capgemini needs to develop its project services and application management.”

Hayward said Capgemini would also become “a significant player in India and pull well ahead of its European peers in offshore provision”.

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