After Tata Motors Limited (BOM: 500570), it’s Infosys’ turn. The second largest Indian IT firm offered to buy up Axon Group PLC (LON:AXO), a UK based SAP consultancy firm with a cash offer of £407m. Infosys Technologies Limited (BOM:500209) is buying up the company to increase its presence in the European market. Under this deal, the three founders of Axon Group will walk away with about £70m.
The news sparked fears of job losses and mass-outsourcing among the workers but Infosys CEO, Kris Gopalakrishnan assured that there will be no job losses. He said that there would be little overlap between the clients of the two companies.
At present, Infosys Technologies Ltd. employs 90,000 people majority of which are in India. Axon Group PLC has 2,000 employees. The company mainly works with firms that use business software developed by German SAP. Mr, Gopalakrishnan said:
"It is very important to us that people stay and make the whole thing work. . . .We are doing this acquisition so we can leverage all the employees."
Under the current deal, Axon will be paid 600p per share. Infosys is giving the money from its own fund. The deal is backed by the management of Axon Group PLC and its three founders who currently holds just under 17.9% share of the company. The transfer process is expected to finish in November 2008.
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