Capgemini said yesterday it would buy the US-listed IT services group Kanbay for $1.25bn in a deal that will nearly double its Indian workforce, add new US clients and strengthen its presence in financial services.

The agreed offer of $29 a share will be Capgemini's biggest acquisition since buying Ernst & Young's consulting arm in 2000, an ill-timed acquisition that triggered a three-year slump in the fortunes of the group, Europe's IT services market leader.