The two companies have been in alliance talks for several months.

According to Les Echos, Cap Gemini, Europe's largest information-technology services and consultancy group, will offer one of its shares for three Transiciel shares, and the bid must receive at least 67-percent approval from Transiciel shareholders.

The Wall Street Journal quoted people familiar with the matter as saying that Transiciel chief executive Georges Cohen and other Transiciel management had already committed stock equivalent to a 37-percent stake to the deal.

The Journal also said that the deal, which will see Cap Gemini merge Transiciel with its Sogeti unit, is expected to contribute positively to Cap Gemini's earnings from 2004.

However, the combined Transiciel-Sogeti activities would have lower operating margins than Sogeti's current eight-nine percent, the Journal's sources said.

Trading in Cap Gemini and Transiciel shares was suspended in Paris Monday pending a statement, stock exchange Euronext said.

SPACE.WIRE