HP in talks to acquire PwC consulting
Published: 11 Sep 2000 12:48 BST
Hewlett-Packard is in talks to acquire the consulting arm of PricewaterhouseCoopers in a cash and stock deal worth $17bn to $18bn (£11.96bn to £12.67bn).
HP said in a release Monday that it still has significant issues to work about before a deal can be finalised. If the deal does go through, the acquisition is expected to be accretive to HP's current 15 percent revenue growth guidance and mildly dilutive to its fiscal 2001 earnings per share. It should not affect EPS in 2002, the first full fiscal year of operations.
PwC has had its consulting arm on the block for some time. The company announced in February that it would break itself into five pieces, in part due to regulatory concerns regarding audit firms acting as consultants.
PwC is HP's auditor, a fact that could hamper any deal. HP said in a release that it would terminate that arrangement if a deal goes through.
Adding PwC's consulting arm to its services business would "further (strengthen) the linkage between business process transformation and technology implementation," HP said in a release. HP's services business reached 1.82bn in the third quarter, a 17 percent increase from the year-ago quarter's $1.55bn.
The deal would be the first big acquisition by HP CEO Carly Fiorina, who took the reins of the company last year. Shares of HP closed down 2.78 at 121 Friday.
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