The acquisition of Syntel, a 38-year-old company with 23,000 employees, comes after last year's unsuccessful attempt by Atos to buy Gemalto.
Syntel provides technology and IT services utilising a network of software development centres in India.
Atos will pay $41 per share, a premium of 4.78 percent to Syntel's closing price of $39.13 on Friday. Including net debt, the transaction is valued at about $3.57 billion.
Atos said it expects the deal to provide double digit earnings per share (EPS) growth from 2019, with Syntel bringing the group around $1 billion in revenue and an operating margin of around 24 percent.
Analysts at Invest Securities said the price was "not excessive," but a Paris-based trader pointed to the funding of the deal as a cause for concern.
"They are financing it through debt, which is becoming a source of concern among investors with rising interest rates and a high level of debt among companies," he said.
Analysts and traders also pointed to the company's first half results as a source of concern.
"Atos H1 release suggests to us a deteriorating underlying picture, particularly in North America, against hopes that by this time its organic growth trajectory should have been improving," said Ameet Patel, Senior Analyst for Northern Trust Capital Markets.
Atos' payments division Worldline on Monday reported half-yearly organic revenue growth of 5.8 percent and announced a deal to process payments for Commerzbank, sending its shares up over 4 percent.