21 July 2003 CSC has approached Franco-US oil services group Schlumberger with an informal bid for its SchlumbergerSema IT services operation.
CSC has already got to the stage of conducting due diligence, although a price has yet to be agreed and a deal may take some time to finalise, according to a source quoted in the Financial Times.
A divestiture of SchlumbergerSema by Schlumberger has been on the cards since the December 2002 announcement by Schlumberger that it was to re-organise the division and concentrate its IT services operations on the energy market.
CSC, for its part, is keen to expand into the European public sector where SchlumbergerSema is particularly strong. SchlumbergerSema has contracts with the Metropolitan Police, various parts of the National Health Service in the UK and enjoys a prominent position in the French public sector.
CSC is almost four time the size of SchlumbergerSema. During 2002, SchlumbergerSema reported an operating profit of $34.3 million on revenues of $2.99 billion. In contrast, in its latest fiscal year — to the end of March; CSC reported net income of $440.2 million on revenues of $11.3 billion.
SchlumbergerSema was formed in 2001 in a surprise deal which valued French services company Sema at $5.2 billion. At the time, analysts expressed surprise that Schlumberger was paying so much for what was then a troubled company and also questioned the likely fit of the two companies.
