French technology company Capgemini announced Sunday it will sell its U.S. subsidiary, Capgemini Government Solutions (CGS). The decision comes after increased scrutiny from French lawmakers regarding a contract CGS signed with U.S. Immigration and Customs Enforcement (ICE).
Concerns Over ICE Contract
The calls for clarification originated with French lawmakers, including Finance Minister Roland Lescure, following concerns about ICE tactics. These concerns arose in the wake of a fatal shooting involving ICE agents in Minnesota last month.
Control and Alignment
Capgemini stated that legal constraints related to U.S. federal contracts involving classified activities hindered the company’s ability to maintain appropriate control over CGS operations. The company believes this lack of control prevented CGS from fully aligning with Capgemini’s overall objectives.
The divestment process will begin immediately, though Capgemini has not directly linked the sale to the ICE contract.
Financial Impact
Capgemini indicated that CGS represents a relatively small portion of its overall revenue. The subsidiary accounts for 0.4 percent of the company’s estimated revenue for 2025 and less than 2 percent of its revenue within the United States.
The sale of CGS could lead to other companies specializing in government contracting bidding for the subsidiary. Alternatively, Capgemini may seek a private equity buyer. It is also possible the sale could be delayed depending on regulatory reviews and the complexities of transferring government contracts.
Frequently Asked Questions
What prompted Capgemini to sell CGS?
Capgemini stated the sale was due to legal constraints in the U.S. that limited its control over CGS operations and its ability to ensure alignment with company objectives.
Was the ICE contract the direct cause of the sale?
Capgemini did not explicitly state that the ICE contract was the reason for the sale, but the announcement followed scrutiny from French lawmakers regarding the contract.
How significant is CGS to Capgemini financially?
CGS represents 0.4 percent of Capgemini’s estimated revenue in 2025 and less than 2 percent of its revenue in the United States.
How will this decision impact the future of international technology firms operating within the U.S. government contracting space?
