HCLTech has done three major acquisitions overseas in the last two years, all in Europe. Similarly, for Tech Mahindra, acquisition of CTC (Com Tec Co IT Ltd) in 2022, is the second-largest acquisition that the company has made after scam-hit Satyam in April 2010.

An email to Infosys didn’t elicit any response until the publication of this report.

Out of the total number of acquisitions done by Infosys in the last six years, nearly 40% focused on Europe. In absolute numbers, the IT major made a total of 16 acquisitions since April 2018, and out of that six were done in Europe, followed by five in the US, as per a Kotak analyst note. The latest acquisition being an engineering R&D services provider, in-tech that is focused on the German automotive industry. The cost of the acquisition is pegged at $480 million (450 million euros).

Similarly, Wipro’s largest acquisition in its history was in Europe. It acquired London-based global management and tech consultancy firm Capco for a consideration of $1.45 billion in 2021 to boost its presence in banking financial services and insurance (BFSI) vertical. Wipro during the Q4 earnings also revealed that consulting business is seeing green shoots and Capco unit grew 6.6% sequentially, much higher than Wipro’s overall revenue growth at 0.01% QoQ.

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For the third largest IT major in India, HCLTech – the three major acquisitions that it has made in the last two years were all in Europe. It made its European acquisition last year when it bought German automotive engineering services company ASAP Group for $279 million. The other two acquisitions in 2022 were Starschema, a leading provider of data engineering services, based in Budapest, Hungary and Confinale AG, a Switzerland-based digital banking and wealth management consulting specialist.Fifth largest Indian IT major, Tech Mahindra’s acquisition of Europe-based CTC (Com Tec Co IT Ltd) in 2022 for $310 million, is the second-largest acquisition that the company has made after scam-hit Satyam in April 2010.

Pareekh Jain, CEO, EIIRTrend “There is huge headroom for growth in Europe. But IT companies need language capabilities and local presence to penetrate the market. They are augmenting their capabilities across all service lines in Europe. For IT services, the US is the biggest market. But as far as ER&D (engineering and research and development) services is concerned, Europe is the largest amongst all geography.”

Europe ER&D market size is $41 billion out of a total global $94 billion, highest in any geography. It is also fastest growing at 10% vs 8.5% globally, added Jain. And that’s one of the strong reasons for the majority of big ER&D M& As in Europe. There were more than 25 ER&D acquisitions in Europe in three years, he added.

Peter Bendour Samuel, CEO, Everest Group, said, “Europe is an attractive market for Tech Services. It has grown faster than North America for 10 straight quarters and until the last two quarters it has been the fastest growing market in all the Geographies. Furthermore it is still well behind North America (NA) on digital transformation and is likely to remain an attractive market as European firms spend to catch up with their North American competitors. It also favors tech services firms with a strong domestic presence, hence the Indian companies are very active in looking for and acquiring European assets which will anchor their ongoing expansion in the region.”

New Jersey based Cognizant, which has a majority of its employees based in India, acquired Mobica, an eastern European engineering service provider with 900 people, last year.

Analysts say that India’s largest IT services firm Tata Consultancy Services (TCS) which is generally shy of inorganic route, hasn’t made any significant acquisitions in the last 10 years. But the IT bellwether has been active in acquiring captives of clients and its last major acquisition of client’s captive was its acquisition of 100% of the shares of Postbank Systems AG (PBS) from Deutsche Bank AG.