Steria and Sopra will merge to tap digital opportunities

French IT services companies Steria and Sopra will merge to create a European organisation that can compete in a sector that is being transformed through the digitalisation of business.

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The merger, which is described as a “friendly tie-up”, will create a group with €3.1bn sales, 35,000 staff and customers in 24 countries. It is also expected to cut operational costs by €62m a year.

Steria is the better known brand in the UK, with sales worth over €700m, compared with Sopra’s €80m UK sales. The deal could also help Steria expand into Scotland, where Sopra has a bigger business.

John Torrie, UK CEO at Steria, said the companies complement each other. He told Computer Weekly that while Steria generates annuity-based revenue, Sopra is more project focused.

He added that Sopra is focused on applications, with significant maintenance and testing capabilities, and has a standalone software business that supplies the finance sector, while Steria is a specialist in shared services and business process outsourcing (BPO).

In 2012, Sopra acquired a UK-based subsidiary of consulting and data management company Business & Decision Group. This gave it 350 UK-based consultants.

Sopra chairman Pierre Pasquier and Steria CEO François Enaud jointly issued the following statement: “The idea of combining forces has always looked like it made sense. The accelerating pace of the digital revolution and new modes of consuming services are giving rise to a deep-seated change in our market.”

In the statement, the business leaders said the combined resources will help the merged companies transform business customers through the combination of software and BPO.