LogicaCMG is paying £882m for WM Data - a pan-Scandanavian services company.
The price is about 25 per cent higher than shares have been trading at for the last three months. The takeover bid is unaminously backed by the WM Data board of directors. The deal will make the new firm the seventh largest IT services company by revenue in Europe.
The new company will have 40,000 employees in 41 countries and would have brought in revenues of £3bn for the year ended 31 December 2005. This would make the combined company a global top 20 IT services company by revenue and second largest listed IT services firm in Europe.
A spokeswoman for the company said the deal was about growth not cost savings. The deal will support Logica's strong position in France, the Netherlands, and the UK. There is little overlap. If the deal goes through the combined firm should enjoy cost savings of £15m - a spokeswoman said little of this would come from job cuts.
Dr Martin Read, LogicaCMG's chairman, said: "Increasingly, our customers want to do business with a smaller number of larger suppliers who can provide them with a broader range of offerings and support them internationally."
WM Data has about 9,000 employees in Denmark, Finland, Norway, Sweden, Poland and Estonia. WM Data uses Estonia and Poland for offshoring, or nearshoring, but now the firm will have access to LogicaCMG's Indian and central European offshore centres.
WM Data brought in revenues of £681.8m for the year ended 31 December 2005 and a profit of £29.5m.
There's a press release available here - but only if you live in the right country. ®