Slashdot Mirror
IBM Getting PwC Consulting for $3.5 Billion
MoThugz writes: "This Yahoo! News article reports that IBM will be buying PriceWaterhouseCoopers Consulting for a cool $3.5 billion in cash and stock. From the page: 'The purchase is aimed at boosting slowing revenues in the computer giant's large services business, which now accounts for more revenue than its well-known computers and mainframes. ... The merger gives IBM, the world's largest supplier of computers and computer services, the consulting arm of PriceWaterhouseCoopers, the world's largest accounting firm. The combined IBM-PriceWaterhouseCoopers will rank a close second to top consultant Accenture Ltd. , formerly Andersen Consulting.'"
and this post gets modded down as redundant:
Accenture was originally part of the Arthur Andersen LLC conglomerate, as Andersen Consulting. Notice the consulting, not accounting. In January 2001 they renamed themselves to Accenture and began public trade.
That all doesn't mean that it's off the hook, however.
My current summer job is at Accenture and I've had to listen to these damn presentations about Accenture's history, so I might repeat it to clear the confusion. :)
In the beginning... there was Arthur Andersen, they founded a computer and strategy consulting company called Andersen Consulting. It didn't take many years for Andersen Consulting to grow larger than Arthur Andersen itself. Now Andersen Consulting had to pay each year large amounts of money to their parent company, because they couldn't make enough money on their own.
Now the people at Andersen Consulting wanted to break from Arthur Andersen, because they thought the yearly payments they made to Arthur Andersen was slowing down their growth. Arthur Andersen however didn't want to let Andersen Consulting go, so a legal battle began. As a part of the settlement in this legal battle (sometimes during year 2000), Andersen Consulting agreed to change their name to Accenture.
So basically the people here hate Arthur Andersen and they've been laughing their asses of because of Arthur Andersen & Enron.
So PWC had to sell off their consulting unit to somebody, or spin it off as a standalone entity. IBM makes sense as a buyer, since they already do IT consulting and related services. IBM probably got a good price, since this was a forced sale.
No big thing; it actually makes sense as a deal.
Right. I worked for one of these orgs too, and since the accountants had more votes in the partnership and held the managing partner positions, they called all the shots. The consultants just got to complain about it and threaten to go elsewhere. Remember Accenture's multi-year fight to get out from under the thumb of AA? It was only resolved through *big* payments from Accenture to AA, and then only after bitter arbitration.
From Accenture's IPO prospectus:
"Until August 7, 2000, we had contractual relationships with Andersen Worldwide and Arthur Andersen under certain agreements whereby we and our "member firms," which are now our subsidiaries, on the one hand, and Arthur Andersen and its member firms, on the other hand, were two stand-alone business units linked through various member firm agreements to Andersen Worldwide, a single coordinating entity. On December 17, 1997, the Accenture member firms requested binding arbitration of claims that Andersen Worldwide and the member firms of Arthur Andersen, among other things, had breached or failed to perform material obligations owed to the Accenture member firms under the member firm agreements.
"On August 7, 2000, the parties to the arbitration were notified that the tribunal appointed by the International Chamber of Commerce in its final award, dated July 28, 2000, had ruled that Andersen Worldwide had breached its material obligations under the member firm agreements and that the Accenture member firms were excused from any further obligations to Andersen Worldwide and Arthur Andersen as of August 7, 2000. Under the terms of the final award, Accenture, and each of the member firms comprising it, was required to cease using the Andersen name or any derivative thereof, no later than December 31, 2000. On January 1, 2001, we began to conduct business under the name Accenture.
"On December 19, 2000, Andersen Worldwide and Arthur Andersen LLP, on behalf of themselves and all other Arthur Andersen member firms, partners, shareholders and others, and Accenture Partners, S.C. and Accenture LLP, on behalf of themselves and all other Accenture member firms, partners, shareholders and others, executed a binding memorandum of understanding agreement to settle and resolve all existing and potential disputes among the parties concerning the implementation of the final award and the separation of the Accenture member firms from Andersen Worldwide and Arthur Andersen, including the discharge and release of all obligations of parties under the terminated member firm agreements between the Accenture member firms and Andersen Worldwide. The memorandum of understanding agreement provided for the parties to enter into a number of definitive agreements with respect to services, subleases, releases and indemnities and to finalize other arrangements among the parties. It also contained provisions for specified uses by Accenture of its former name. On March 1, 2001, Accenture, Andersen Worldwide and Arthur Andersen completed implementation of the memorandum of understanding agreement by executing releases and indemnities, finalizing other arrangements among the parties and entering into services agreements..."
Milo