Infosys, Capgemini merger

News reports in a section of the Press about Infosys' planned bid for the Paris based tech consultancy firm, Capgemini, which boasted of sales exceeding $10.5 billion recently, set the market on fire last week, but both the companies have denied any such move.
As Infosys Technologies dismissed the issue with the argument that the company did not comment on speculative reports, similar comments were reported from the European tech giant as well.
Yet the report about the possible bid by Infosys last week saw the shares of the two companies showing a sharp upward movement, with the scrip of the Bangalore based giant in particular, going up by almost 2.5 per cent at the start of trading. In Paris, Capgemini shares shot up 1.5 per cent at 54.60 euros.
This was, however, also the time for the analysts to plunge in with most highlighting the mismatch between the two giants.
According to one, Capgemini was too huge a fish for Infosys to swallow especially as it had only a cash chest of Rs 6,000 crore or so. Against this, Capgemini could easily cost the IT giant several times that amount, should it agree to Infosys' bid.
At the same time, they acknowledged that the company would indeed be keen to look for acquisition of a sizeable nature to sharpen its competitive edge.