Capgemini acquires Altran

Capgemini acquires Altran

Capgemini acquires Altran: birth of a global giant in the end-to-end digital transformation of the manufacturing sector


Yesterday Capgemini announced its intention to acquire Altran!

This move, beyond strengthening Capgemini's leading position in the IT services market in France, but also in Germany and the United States, also brings it complementarity in a somewhat marginal area of activity up to now: engineering and outsourced R&D.

This subject had been very clearly identified by Capgemini, which had already grouped Sogeti High Tech's activities and part of Igate into an entity dedicated to this market: DEMS (digital engineering and manufacturing services). This activity accounted for only 15% of the total and was fairly strongly located in the United States and France. However, the digital transformation of the industrial sector involves both improving knowledge and customer experience and transforming production processes, the shopfloor, etc OT (Operations Technologies) in the broad sense. Thus, gateways, or even complete integrations between IT and OT, will become very important elements to be mastered in order to be able to support industrial customers end-to-end. And that is clearly Capgemini's positioning! This acquisition therefore takes on its full meaning and appears to be Capgemini's desire to become a strong (even stronger) partner for manufacturers worldwide on topics related to the transformation of customer experience, the cloud, IoT, AI, 5G or more "classic" topics such as PLM, MES, etc which remain important for manufacturers.

For its part, Altran, after 10 years of transformation and several major acquisitions, notably in Germany and the USA, has built up a world leadership position in this engineering and R&D segment, thanks in particular to its solid and well-structured positions in the major industries: aeronautics, automotive, energy/utilities, etc. However, the company was faced with certain problems such as the difficult integration of certain acquisitions or its weakness in terms of information systems.

Even if the engineering and R&D market is still very much oriented towards technical assistance services and often quite local, Altran is certainly the most international player, the one with the most developed offers and positioning in centres of expertise, but also the one that has clearly displayed its desire to turn to offshore. All these elements lead us to believe that Altran should integrate smoothly into Capgemini (even if integrations of this size are never obvious), which has a fairly similar approach. This is all the more true (but it could also prove to be a hindrance) since several of the main leaders are former Capgemini employees.

Beyond the financial aspect for shareholders, and in particular for the apax fund, which is signing a very good deal, the deal is very interesting for Altran, which is "changing dimension" with this merger. Indeed, being part of the group will allow it to benefit from all the industrialization already in place, from the presence in a large number of countries, from the ability to respond to very large and international projects more easily and to offer its customer base the entire digital transformation part of the front office, etc.

For French digital technology, which is struggling to generate world champions, this operation is extremely positive. With 17 billion euros, the Capgemini group enters the world's Top 5 and is "locking" Altran, which was the target of several predators. New proof of the resilience of this key pillar that is Capgemini, a few years after the death of its founder.

The next logical step in organizational terms following this acquisition should lead to the birth of a second vertical GBU (Global Business Unit) within Capgemini to address what Capgemini calls "the Intelligent Industry"? All that remains now is to make this integration a success!