Persistent Systems to Acquire Nagarro in $2.9B AI Engineering Deal

Persistent Systems is buying German digital engineering firm Nagarro in a voluntary public takeover offer at EUR 81 per share. The deal values Nagarro at roughly EUR 1.6 billion on a fully diluted basis, according to the offer terms. Persistent's German subsidiary will also acquire a 21% stake from Nagarro's largest shareholder, Lantano Beteiligungen, under a separate agreement.

The combined entity would generate $2.9 billion in revenue and employ about 46,000 people across 40 countries, the companies said in a statement. About 37,000 employees are in India, 3,500 in North America, and 3,000 in Europe. The workforce is roughly evenly split between Persistent and Nagarro's existing headcount.

Management framed the merger as a complement in geography and capability. Persistent leads in AI-backed engineering and has deep North American client relationships. Nagarro brings European scale, ERP and customer experience delivery, and its own AI expertise. "The proposed combination is designed to create a scaled, globally diversified AI-led digital engineering and enterprise modernisation powerhouse," the statement said.

Nagarro's supervisory board and management support the offer and plan to recommend it to shareholders. The transaction still needs regulatory approvals and must clear a minimum acceptance threshold before it closes.

The deal reshapes the mid-tier Indian IT landscape. Persistent, which had roughly $1.2 billion in revenue before the deal, more than doubles in scale. That puts the combined company in the same revenue bracket as LTI Mindtree and Tech Mahindra, based on publicly reported figures. The European exposure offsets Persistent's historical reliance on North America, where it generates about 70% of revenue.

Integration risk is material. Persistent has to absorb a European-listed firm with a different corporate culture, currency exposure, and client base. The offer premium – Nagarro shares traded near EUR 65 before the announcement – suggests Persistent sees enough cost and revenue synergy to pay a 25% markup. The companies have not disclosed specific cost-saving targets or expected margin improvements.

For Nagarro shareholders, the EUR 81 price is a cash exit. For Persistent, the bet is that the combined AI and cloud capabilities will win multi-region enterprise contracts that neither company could compete for alone. The next catalyst is the offer document, which will lay out the minimum acceptance level and timeline. Persistent did not say when it expects the deal to close.