A successful bid from CGI for Logica is far from certain due to the potential for failure because of the difference in size between the two companies along with expected counter offers.
The procurement of companies greater than 50 percent than that of the buyer have a high rate of failure, the size of Logica in relation to CGI make the deal unstable, particularly with CGI reporting failing profits.
Indian based firms have raised a high degree of interest in potential acquisitions in Europe and the Logica offer is unlikely to end without counter bids. Philip Carnelley, research director at Pierre Audoin Consultants, commented on the bid “CGI and Logica have almost no overlap in operations –we can think of several other IT services players who would also be a good, complementary fit.”