16 April 2004 Cap Gemini Ernst &Young, Europe’s biggest IT services supplier, has changed its name to Capgemini in a €60 million re-branding.
The company was forced to change its name under the terms of its €11.5 billion acquisition of accountant Ernst &Young’s IT consulting division in May 2000 because the accountancy firm gave Capgemini only a limited time to use its name.
The “Ernst &Young” suffix was adopted after the acquisition in a bid to increase its brand recognition in the US, where the presence of the Paris-headquartered company had been particularly weak.
Despite this, Capgemini had been promising such a re-branding for some time. In April 2001, the-then CEO Geoff Unwin said that the company had “very exciting plans for the re-branding of the company’s name”. However, nothing emerged and Unwin was succeeded as CEO before the end of the year by Paul Hermelin, who had been chief operating officer under Unwin.
The Ernst &Young acquisition helped the company to bump up annual sales to €8.4 billion in 2001, with revenues for 2002 forecast to weigh in at €9.6 billion. However, the purchase coincided with the start of the downturn in IT spending, which hit consulting firms such as Ernst &Young particularly hard.
In 2003, Capgemini’s sales fell steeply for the second year running, from €7.05 billion in 2002 to €5.75 billion. Capgemini is now in danger of losing its position as Europe’s biggest services company to Franco-Dutch rival Atos Origin.