OVUM. Phil Codling
We plan to speak to Fujitsu later today to get more detail on its plans, and will bring our readers further comment following that. However, at first pass, this is a logical, positive and indeed expected move for Fujitsu. To quote the competitive analysis of Fujitsu Services UK that we published in February: "It must gain critical mass in France and Germany if it is to be seen as a serious pan-European player ...The TDS acquisition in Germany is a start here, but is essentially a dummy run."
So GFI fits Fujitsu's urgent need to get more scale in mainland Europe. Happily, the business is not just a player in France (where Fujitsu was utterly under-scale) but also brings useful presence in Italy and Iberia. The services and skills fit looks positive too. GFI's applications and projects bias complements Fujitsu's existing infrastructure and outsourcing strengths, and could help to reduce the business's reliance on a sluggish and commoditising infrastructure market. The fact that GFI is predominantly a private sector player helps too. Fujitsu will only achieve its ambition of tier one status across Europe by adding more business in finance, telecoms, retail, etc, to its UK government interests.
So overall, while GFI doesn't fulfil in one fell swoop Fujitsu's strategic ambitions in Europe (or even, arguably, in France, in terms of sheer scale), it would be a very important step towards achieving them. It's worth bearing in mind, however, that this is far from a done deal. Fujitsu describes its approach, which does not currently have backing from GFI management, as "friendly but not formal". For it to be successful, GFI shareholders will need to reject the proposed fund raising exercise with Apax Partners announced in January. Given that Fujitsu is offering a premium over the Apax deal, the odds seem to be in its favour. But given its requirement for skills in France and Southern Europe and the dangers of hostile takeovers in the services market in particular, it will be keen to make sure it remains on friendly terms with its target in the coming weeks.