Armonk, N.Y. (July 31, 2002) -- In an unexpected move, IBM announced Tuesday that it had signed an agreement to purchase PricewaterhouseCoopers' consulting unit for $3.5 billion.The transaction scuttles PwC’s plans to pursue an initial public offering for the consulting unit which was slated for August, and effectively kills the name "Monday" PwC had picked in June to call its consulting arm.
In a press release, the two companies said they’ve signed a definitive agreement which was approved by each of their boards of directors. The transaction is subject to regulatory approvals and the approval of local PwC partners, and is expected to be concluded by the end of the third quarter.
PwC Consulting, with roughly $4.9 billion in revenue and some 30,000 employees, will be combined with the Business Innovation Services unit of IBM Global Services, creating a new global unit.
When asked how long the hush-hush deal was in the making, PwC spokesman Steve Silber would only say that "These things don’t happen overnight."
He added that the name "Monday" which the firm hailed only two months ago as "a new identity on which to build our company’s future" is "no longer in play" and will not be used by IBM.
"This transaction fulfills our commitment to fully separate PwC Consulting from PwC," said PwC chief executive Samuel A. DiPiazza, Jr. in a statement. "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."
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