Creating economies of scale by merging ever-shrinking infrastructure services businesses
DXC Technology, the beleaguered tech services provider that emerged from the alliance between HPE Enterprise Services and CSC then lost billions in revenue, is again reportedly the subject of takeover talks.The pair reportedly launched a joint bid of between $22 and $25 per share, a premium on the record-low $15 stock price that DXC was valued at on the NYSE. Shares jumped to $18.45 following the news on June 10.
Jon C Davies, analyst at UK-based TechMarketView and a former DXC employee, said the insurance biz is the"global leader in life and wealth, speciality and reinsurance while the company's technology processes one in five property and casualty transactions worldwide." There is no guarantee that DXC will be sold, and new broom Raul Fernandez, who joined the business in February, hasn't yet had time to show investors he has the ability to turn the ship around.Like rivals in the field of infrastructure services, DXC has become less relevant in the cloud era. Kyndryl was exposed for the same reason when under IBM's control and experienced a reduction in sales before it was shipped out as a separate entity. Atos is going through similar pains.
Davies at TechMarketView said:"While none of the parties involved have issued any comment on the unconfirmed reports, such a move would not be unexpected considering DXC's failure to deliver revenue growth and its most recent financial performance.
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