[Am-info] IBM Buys Monday On Tuesday

[Fred A. Miller]

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IBM Buys Monday On Tuesday

IBM's massive services organization could get even bigger. It=20
revealed plans Tuesday to buy PwC Consulting, the consulting and=20
services unit of PricewaterhouseCoopers, in a cash-and-stock deal=20
valued at $3.5 billion. PwC expects to post revenue of $4.9=20
billion in 2002. Two years ago, Hewlett-Packard tried to buy the=20
consulting firm for $18 billion.

PwC's 30,000 employees would be merged into IBM's $35 billion,=20
150,000-person Global Services unit. Ginni Rometty, general=20
manager of Global Services for the Americas, would head up a new=20
division made up of PwC employees. She would report to Doug Elix,=20
an IBM senior VP who heads up the entire IBM Global Services=20
unit. IBM execs speaking at a media conference call didn't say=20
whether layoffs would follow. For its part, PwC would forget its=20
planned IPO and drop the idea of renaming itself "Monday." The=20
deal could close by the end of September.

IBM execs said they'd considered buying PwC two years ago, but=20
thought it was overpriced. The acquisition could cause=20
fourth-quarter earnings to drop by almost 30 cents a share, they=20
said. "By 2004, it will contribute to double-digit revenue=20
growth," Elix said, similar to "that of the rest of IBM Global=20
Services." - Diane Rezendes Khirallah

Get more background on this story. Read:
HP, PricewaterhouseCoopers End Deal=20
http://update.informationweek.com/cgi-bin4/flo?y=3DeII50Bce7K0Cmm0Bf6C0Au

IBM: We Handle The Services, You Keep The Equipment=20
http://update.informationweek.com/cgi-bin4/flo?y=3DeII50Bce7K0Cmm0Bf6D0Av

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Fred A. Miller
Systems Administrator
Cornell Univ. Press Services
fm@cupserv.org, www.cupserv.org
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