Emerging Markets : Infosys Climbs Up The Value Chain
COMPANY TO WATCH: INFOSYS TECHNOLOGIES/INDIA


Infosys Technologies, India’s second-largest IT services provider, announced a $755 million cash deal to buy UK-based Axon, which advises companies on installing business software created by SAP of Germany.

If the transaction is completed, it will be the biggest overseas acquisition ever by an Indian IT outsourcing company. The deal will help Infosys move up the value chain. India’s rising labor costs are forcing its outsourcing companies to move from labor-intensive, commodity-like services to faster-growing consulting businesses.

Bengaluru-based Infosys is putting itself in a position to advise more global corporations on re-engineering their business processes as they move into new markets. The purchase also underscores a trend for India’s successful companies to make cross-border acquisitions.

Infosys already has 2,100 consultants working in its SAP practice, and Axon would give it an additional 2,000 SAP specialists. ABN AMRO India is advising Infosys on the proposed acquisition, and Citi is advising Axon. The British company has clients in a broad range of industries, including aerospace, retail, manufacturing and utilities.


Gordon Platt
 

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