Infosys looking for acquisitions in Europe, Japan
17 Nov 2008
The global economy may be in turmoil with corporate spending down to a minimum, but India's second largest IT exporter Infosys Technologies sees no reason to worry about loss of business. In fact, company CEO Kris Gopalakrishnan, speaking on the sidelines of an economic summit in New Delhi, today said that Infosys was looking at mergers and acquisitions in Europe and Japan, as it would ''accelerate growth''.
Nor is he unduly worried by the Obama effect. During his campaign, US President-elect Obama said he would offer incentives to companies that created jobs at home and halt tax breaks to those that ship work abroad. However, Gopalakrishnan does not foresee a sea change in American government and corporate policy on the thorny issue of outsourcing.
''We are looking at acquisitions and have a dedicated team working on it. We do not make an acquisition based on valuation alone, we will invest and acquire in companies which make strategic sense and are able to integrate in that entity properly,'' Gopalakrishnan said.
''We had two focus areas to fill a gap in our services like consultancy, business process outsourcing and geography-based acquisitions, typically in Europe and Japan, where with acquisition we can accelerate growth,'' he added.
Of course, he asserted that any such investment had to be in the ''right company for the right price'', perhaps alluding towards its failed attempt to buy British software group Axon earlier this year when its $753 million bid was trumped by Indian rival HCL Technologies.See: HCL sidelines Infosys in Axon acquisition
As regards the possibility of protectionist policies from the incumbent US administration, he said similar promises were heard during previous presidential campaigns, such as John Kerry's in 2004, and nothing had come of them.
"In the past, when we've seen the mention (of curbing outsourcing) during the campaigns, it did not translate into a change," he said. At the same time, he said, it would be a mistake to embark on "reverse globalisation" in response to the worldwide financial crisis by retreating on outsourcing. "We should continue to support globalisation," he said. "It's one of the opportunities for growth."
Although he did express concerns at the current downturn, he said, ''the medium- to long-term outlook'' was ''positive''. As a result, Infosys, one of the largest employers in the private sector, was still on track to hire 25,000 workers this year to add to its 100,000 workforce, down from around 32,000 hired last year, and that there were no layoffs planned.
Giving his approval to the bailout package of the US government, he said the global economy would stabilize by the second half of 2010 and then return to previous levels of growth.
