EDS frozen out as Schlumberger scoops up Sema

An unconfirmed report yesterday in UK newspaper the Observer suggested that EDS was prepared to make an offer. However, Sema and Schlumberger confirmed this morning that they have signed a deal which is expected to be complete by the second quarter of 2001.

Sema has been considering takeover options having seen its share value drop by over 50 per cent since November following two profit warnings. The firm was also hit by poor market performance from German software house LHS, acquired by Sema last June for £1.9bn.

Schlumberger has recently been acquiring companies in attempt to expand its oilfield business into new services and technologies.

Sema shares rose 18 per cent in early trading this morning, on the back of reports that the two companies were close to finalising a deal. Schlumberger has not yet announced whether it intends to keep Sema or spin off its various operations.

Despite the imminent takeover, Sema was last week chosen by the UK government as systems integrator for its e-government initiative, the Gateway Project.