The story so far: On early Saturday morning Pune based mid-sized company Persistent Systems Limited announced entering into an agreement to acquire Nagarro, a Munich, Germany-headquartered digital engineering company, through a voluntary public takeover offer vaulting that company at €1.1 billion (₹11,820 crore).
The acquisition will be done by Persistent Systems and its wholly owned direct subsidiary Galaxy Germany Holding SE.
Once completed, the deal would create one of the world’s largest AI-led digital engineering companies, with nearly $2.9 billion in annual revenue and more than 46,000 employees across more than 40 countries.
What is the offer all about?
Persistent Systems has signed a Business Combination Agreement (BCA) with Nagarro and will offer €81 per Nagarro share in cash to all shareholders which represents about a 140% premium over Nagarro’s closing share price before the announcement.
Persistent wants to acquire all outstanding shares of Nagarro and delist the company from the stock exchange of Germany. Persistent has also entered into a fully binding share purchase agreement with Lantano Beteiligungen GmbH, the investment vehicle of the largest shareholder of Nagarro, under which Lantano has agreed to sell its entire approximately 21% stake in Nagarro (excluding treasury shares) to the Bidder at the Offer Price.
Why is Persistent acquiring Nagarro?
The acquisition is driven by one major theme which is building a global AI powerhouse. Both companies believe the next generation of IT services will revolve around Artificial Intelligence, Digital Engineering, Cloud, Enterprise Modernisation, ERP and Customer Experience (CX).
Rather than building these capabilities over many years, the merger allows Persistent to combine strengths immediately.
The transaction is expected to be cash EPS accretive for Persistent shareholders in the first year of the transaction. Persistent will fund the transaction with committed financing from Barclays.
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What are both companies bringing to the table?
While Persistent has strong capabilities in AI-led software engineering, cloud and platform engineering also has sizeable business in North America with banking and health-care clients, Nagarro has strength in digital engineering, AI consulting, ERP implementation, Customer Experience (CX), cloud & platform engineering and strong presence in Europe.
Persistent with revenues of $1.7 billion has more than 27,500 employees and has operations in 21 countries. Nagarro on the other hand has €1 billion revenue, 18,500 employees and operations in more than 40 countries.
What will the combined company look like?
After the merger, the combined entity will have revenue of $2.9 billion, more than 46,000 employees and have operations in more than 40 countries.
With North America revenue of $1.7 billion and Europe revenue of $600 million, the combination will serve clients across Banking, Health care, Automotive, Manufacturing, Consumer Goods, Technology, Media, Telecommunications.
Why is this deal important?
Stronger AI capabilities: Together, the entity will have more AI engineers, large AI platforms, better enterprise AI solutions, greater ability to deliver large AI transformation projects.
Better geographic balance: Persistent has traditionally been stronger in North America. Now Nagarro brings deep European customer relationships, four of Europe’s top five automotive manufacturers as clients, local delivery teams across Europe. This will significantly strengthen Persistent’s European presence.
Larger customer base: The combined entity will have more than 350 major enterprise customers, top global banks, leading health-care companies, major automotive manufacturers and technology companies. This would create more opportunities to cross-sell services.
What will happento Nagarro?
If shareholders approve the offer it will become part of Persistent which plans to delist Nagarro from the Frankfurt Stock Exchange.
Nagarro’s management and culture are expected to be retained. Persistent says it does not intend to implement a domination and profit transfer agreement (DPLTA) for at least two years after closing of the deal.
What does this mean for employees?
According to Persistent, the deal is focussed on growth rather than cost-cutting. It has said employees can expect larger international projects, more career opportunities, greater exposure to AI technologies and continued respect for Nagarro’s culture and leadership.
Persistent has also stated it does not intend to terminate existing collective bargaining or employee agreements.
What does it mean for customers?
Customers gain access to a larger technology partner offering AI solutions, Software engineering, ERP implementation, Cloud services, Customer experience transformation, Data and analytics and Global delivery capabilities. They can avail end-to-end digital transformation from strategy to execution.
What are the next steps of the deal?
It needs approval of the offer document by Germany’s financial regulator (BaFin), acceptance by at least 50% plus one share of Nagarro shareholders, regulatory approvals in relevant jurisdictions. The companies expect the transaction to close between Q4 2026 and Q1 2027.
Who is Persistent & its founder?
Persistent Systems Limited listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) is a global services and solutions company delivering AI-led, platform-driven Digital Engineering and Enterprise Modernisation to businesses across industries. It is part of the MSCI India Index.
With 468% growth in brand value since 2020, Persistent is the fastest-growing IT services brand in ‘Brand Finance India 100’ 2025 Report.
The company was founded in 1990 in Pune by Dr. Anand Deshpande who is also the Chairman and Managing Director. Over the last three and a half decades, he has helped build Persistent from a small start-up in Pune into a globally recognised digital engineering company, contributing to India’s emergence as a trusted destination for technology innovation and product development.
He has long believed that engineering, entrepreneurship and strong institutions are the foundations of enduring economic and social progress. Throughout his career, he has worked at the intersection of technology, education, research and public impact, helping create organisations and platforms that expand opportunity, strengthen institutions and build long-term capability.
He holds a B.Tech. (Hons.) in Computer Science and Engineering from the Indian Institute of Technology, Kharagpur and an M.S. and Ph.D. in Computer Science from Indiana University, Bloomington (USA).
Prior to founding Persistent in 1990, he worked as a Member of Technical Staff at Hewlett-Packard Laboratories in Palo Alto, California.
Conclusion: This is one of the largest acquisitions announced by an Indian IT services company. By combining Persistent’s strength in AI-led engineering and North America with Nagarro’s strong European presence and digital engineering expertise, the companies aim to create a global technology services leader capable of competing more effectively for large, AI-driven enterprise transformation projects.
