Capgemini’s $4 billion offer to acquire iGATE–the largest buyout of an India-related IT services firm–could well be a harbinger of a clutch of merger and acquisition (M&A) deals involving mid-size firms, say industry watchers.
“There are lots of such players which are attractive for big global companies. There won’t be many acquisitions but there can be a few,” said Sanchit Vir Gogia, chief analyst and group CEO of Greyhound Research.
“Some of the smaller companies which are not doing well and are facing hard questions from investors may find sell-out an easier option in an increasingly tough market,” said Gogia, though he refused to name companies.
“Capgemini typically competes with other global MNCs such as IBM, Accenture and Cognizant. But this acquisition allows it to lower prices and fight for smaller accounts,” Gogia said. “Indian players such as TCS, Infosys, HCL and Wipro are in for a tough competition. You can expect price wars and shifting of global accounts,” he said.
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