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IBM Getting PwC Consulting for $3.5 Billion

Posted by ryuzaki0 on from the total-cost-of-ownership dept.

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.'"

3 of 209 comments (clear)

  1. Before Andersen Jokes Spread.. by CBNobi · · Score: 5, Informative

    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.

  2. Re:That was fast by Anonymous Coward · · Score: 4, Informative

    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.

  3. IBM probably got a good deal by Animats · · Score: 4, Informative
    The new corporate-crime bill Bush signed today requires that accounting firms get out of the management consulting business and stick to accounting. Much of the Enron mess came from Andersen both constructing the tax and earnings gimmicks as management consultants, then auditing them as accountants. Big-time conflict of interest. That's now illegal.

    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.