In a joint statement the two firms said IBM would pay PwC $3.5bn (£2.3bn) in cash and stocks and that PwC Consulting, recently rebranded as ‘Monday:’, would no longer pursue its planned initial public offering.
‘The client is the driving force behind today’s announcement with PwC,’ said Samuel Palmisano, IBM president.
‘Our consulting and services professionals will provide a powerful capability, beginning with business innovation and extending through implementation, to help clients improve their competitiveness and drive sustained growth and profitability,’ he said.
The deal is a fraction of the $18bn Hewlett Packard had offered for the Big Four consultancy in September 2000 – that deal fell apart after HP’s share priced tumbled in 2001.
PwC Consulting will be merged into the Business Innovation Services of IBM Global Services, the industry’s largest business and information technology services provider, with revenues of $35bn. PwC Consulting’s latest revenue figures for 2002 stood at $4.9bn.
Sam DiPiazza, PwC’s chief executive, said: ‘This transaction fulfills our commitment to fully separate PwC Consulting from PwC.’
He added: ‘Combining PwC Consulting with IBM not only fully achieves the goals we set for the separation, it provides clients and our professionals with greater opportunities and access to innovative solutions.’
The sale of PwC consulting is the last piece in the great consulting break up jigsaw – Ernst & Young sold out to Cap Gemini, Andersen Consulting split from its now-collapsed parent company to become Accenture and float on the US stock exchange, KPMG Consulting floated in the US, but sold its UK consultancy to Dutch IT group Atos, and Deloitte Consulting, now rebranded as Braxton has been taken private by its own partners.
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