IBM and PricewaterhouseCoopers today announced that IBM would acquire PricewaterhouseCoopers' global business consulting and technology services unit, PwC Consulting. The combination of IBM and PwC Consulting will create a powerful, unmatched capability to help clients solve their business issues, exploiting world-class technology for improved business performance.
The two companies have signed a definitive agreement approved by IBM's board of directors and PricewaterhouseCoopers' leadership board. Under the terms, IBM will pay PricewaterhouseCoopers an estimated purchase price of $3.5 billion in cash and stock. The transaction is subject to regulatory approvals and approval of local PwC firms through votes of their partners, and is expected to be concluded around the end of the third quarter. PwC Consulting will no longer pursue its planned initial public offering.
"The client is the driving force behind today's announcement with PwC," said Samuel J. Palmisano, IBM president and chief executive officer. "Clients are not only looking for innovative ideas to improve their businesses, they are seeking a partner with deep business expertise and the ability to exploit leading, open standards-based technology to turn these ideas into bottom-line business benefits. This acquisition underscores our commitment to this strategy.
"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," Palmisano said. "Together with the world- class innovations of IBM Research and our business partner offerings, this new business unit will deliver comprehensive end-to-end business and technology solutions."
Samuel A. DiPiazza, Jr., chief executive officer of PricewaterhouseCoopers, said, "This transaction fulfills our commitment to fully separate PwC Consulting from PwC. It will unleash the consulting unit from the regulatory restraints of our industry and will allow the business to reach its full potential. 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."
PwC Consulting, with estimated fiscal-year 2002 consulting revenues of approximately $4.9 billion, excluding client reimbursables, and some 30,000 employees, will be combined with the Business Innovation Services unit of IBM Global Services, creating a new global unit. Ginni Rometty, currently general manager of IBM Global Services - Americas, will become general manager of the new unit, reporting to Doug Elix, senior vice president and group executive, IBM Global Services.
This new global business unit will pull from the extensive portfolio of IBM capabilities to offer clients innovative, integrated solutions through business and technology consulting, industry insight and business process expertise together with the comprehensive services capabilities of the rest of IBM Global Services.
Doug Elix, senior vice president and group executive, IBM Global Services said, "This is an exceptionally good fit both strategically and culturally. Our businesses complement each other and we speak the same language."
Throughout the process, IBM and PwC have been working with the SEC staff to establish procedures under a no-action letter to comply with SEC auditor independence rules.
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