Capgemini acquires IGATE for $4 billion in push for US market

The all-cash deal forges an alliance between two giants in the IT consulting space, with combined 2015 revenue estimated at $13.5 billion.

French outsourcer and consulting firm Capgemini has just made a serious push into the American market.

The computer services provider announced plans to acquire IGATE, a rival firm based in Bridgewater, New Jersey, for $4 billion.

The all-cash deal forges an alliance between two giants in the IT consulting space -- with combined 2015 revenue estimated at $13.5 billion -- and marks the largest acquisition for Capgemini since it bought the consulting business of Ernst & Young 15 years ago.

Looking at the bigger picture, the deal helps both companies challenge tech giants such as Accenture and IBM for a larger slice of American market share.

Capgemini said the deal would make North America the company's largest market by revenue while also bolstering key businesses in application and infrastructure services as well as BPO and engineering services. Capgemini noted that IGATE's focus on the financial services sector is complementary to its own businesses targeted at the retail, healthcare and manufacturig industries.

Once completed, an estimated 50,000 employees will be working in the region.

"IGate is a leading company that perfectly fits our strategic ambition," Capgemini CEO Paul Hermelin said in a statement. "It will give us a new status on the American market."

In addition to the geographic and portfolio perks, the deal also widens Capgemini's client base with existing IGATE customers like General Electric and Royal Bank of Canada.



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