Logica and CMG have confirmed they are in talks regarding the commercial merits of a merger. The two companies dominate the mobile phone messaging software market in Europe, but are facing increasing competition for 3G messaging services.
Any deal between Logica and CMG would create one of Europe’s largest quoted IT services businesses. A transaction would be structured as an all-share merger and would result in Logica shareholders owning 60% and CMG shareholders owning 40%, respectively, of the combined entity. It is envisaged that Cor Stutterheim (Executive Chairman, CMG) would be the Non-Executive Chairman and Martin Read (Managing Director & Chief Executive, Logica) would be the Chief Executive Officer of the combined entity.