Capgemini shares surge on $4.1 billion Altran takeover

Capgemini’s shares surged on Tuesday, as analysts welcomed the Paris-based software and consultancy company’s 3.6 billion euro ($4.1 billion) takeover of smaller rival Altran. With the acquisition, Capgemini said it hoped to tap into demand from its customers in industries ranging from telecom to aerospace to outsource engineers as well as research and development teams.

Capgemini shares were up 5.9% in early session trading, having touched their highest level since late April, while Altran climbed 21.6%.
“Not without risk, but creates value nevertheless,” wrote Invest Securities in a note, as it raised its rating on Capgemini to “neutral” from “sell.”

Late on Monday, Capgemini said it would offer 14 euros per Altran share in cash, representing a 22% premium over Altran’s Monday closing price of 11.47 euros. The combined company would have annual revenues of 17 billion euros.

Capgemini expects the deal will result in large cost savings and will add more than 25% to its earnings per share by 2023. “We think the deal makes strategic sense, helping Capgemini to capitalise on the digital transformation of industrial companies,” wrote analysts at Credit Suisse.

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