Capgemini to Buy iGATE for $4 B, Deutsche Bank Net Tumbles

Nigel Thomas
27 Apr, 2015
New York City

Capgemini revenues soared 11% and agreed to acquire iGATE for $4 billion. Deutsche Bank profit tumbled 50% to

[R]4:00 PM Frankfurt – Capgemini revenues soared 11% and agreed to acquire iGATE for $4 billion. Deutsche Bank profit tumbled 50% to€559 million on €1.5 billion of litigation expenses. HSBC intends to spin-off U.K. retail banking business. Sandvik net plunged 72.1%.[/R]

European markets generally closed higher and Greece replaced its finance minister as the point person to negotiate with international lenders as talks drag on for more than three months.

In London trading, FTSE 100 index gained 0.6% or 42.64 to 7,113.34 and in Frankfurt the DAX index climbed 1.8% or 216.62 to 12,027.47.

In Paris, CAC 40 index jumped 1.4% or 71.87 to 5,273.32.

Capgemini Group, the technology and outsourcing services provider said revenues in the first-quarter ending in March soared 10.5% to €2.76 billion and operating margin in the range of 9.5% to 9.8% and free cash flow to exceed more than €600 million from a year ago period.

Separately, the company agreed to acquire the U.S.-based iGATE Corp for $48 a share in cash or about $4 billion.

The two India-American co-founders of the company stand to make $1 billion. Co-chairmen Ashok Trivedi holds 12.81% and Sunil Wadhwani controls 12.99% and collectively stakes are worth $1 billion.

iGATE employs more than 24,000 people in India and globally about 33,000.

Deutsche Bank AG declined 4.2% €30.24 after the Germany-based investment bank reported group revenues in the first-quarter ending in March soared 24% to €10.4 billion from €8.4 billion in a year ago period.

Net income in the quarter tumbled 50% from a year ago to €559 million from €1.1 billion and diluted earnings per share declined to €0.38 from €0.98.

The bank said quarterly profit declined mainly due to litigation settlement expenses of €1.5 billion with the U.S. and U.K. regulators related to inter-bank rates and levy charges of €561 million.

The bank added litigation reserves were €4.8 billion and plans to reduce the stake in Postbank consumer unit through a public offering and shrink its securities business.

Revenue from corporate banking and securities segment soared 15% to €4.7 billion and revenues from Deutsche asset and wealth management business surged 29% to €1.4 billion. Private and business client’s segment revenue edged up to €2.5 billion.

Electricite de France SA gained 1.3% to €23.05 after the Wirtschaftsblatt newspaper reported France-based electricity utility plans to divest its part of stake in Austria-based utility Energie Steiermark for about €270 million to €340 million.

HSBC Holdings Plc climbed 3.5% to 651.90 pence after the Sunday Times newspaper reported the bank intends to spin-off its U.K. retail bank into a separate business for about £20 billion or $30.4 billion.

Swedish Orphan Biovitrum AB surged 21.1% to 135.30 kronor after the pharmaceutical company received a preliminary and conditional non-binding proposal for a possible takeover offer.

Sandvik AB soared 9.2% to 106.75 kronor after the Sweden-based mining and construction equipment maker said revenues in the first-quarter ending in March climbed 12% to 23.33 billion kronor from 20.78 billion kronor in a year ago period.

Net profit in the quarter plunged 72.1% from a year ago to 415 million kronor compared to 1.49 billion kronor and diluted earnings per share dropped to 0.33 kronor from 1.19 kronor.