PricewaterhouseCoopers and Hewlett-Packard Near Multi-Billion Dollar Acquisition Deal

Hewlett-Packard Co. and PricewaterhouseCoopers are in talks to sell the accounting firm's management and information technology consulting practice to the computer hardware maker, with a deal valuation of $17-18 billion. The acquisition would significantly boost Hewlett-Packard's consulting business, moving it towards a service-oriented model, and reduce its dependence on hardware sales. This development has sparked concerns among investors, who are worried about the potential risks and magnitude of the purchase. However, analysts see the deal as a strategic move by Hewlett-Packard to catch up with its competitors, such as IBM, in the growing services market.

Key Takeaways:

• The acquisition deal is valued between $17-18 billion, with Hewlett-Packard offering a mix of cash and stock to PricewaterhouseCoopers.
• The sale would involve PricewaterhouseCoopers' management and information technology consulting practice, which includes 31,000 employees and 1,500 partners out of its global total of 150,000 employees and 10,000 partners.
• PricewaterhouseCoopers is seeking to address concerns about potential conflicts of interest between its consulting arm and its traditional accounting and auditing practices.
• The deal would make Hewlett-Packard's consulting arm roughly comparable to Compaq's Global Services Group, which has 38,000 consultants worldwide.
• Hewlett-Packard has been rapidly expanding its consulting business, hiring 200 consultants a month, and plans to use the acquisition to accelerate this growth.

Statistics:

• $17-18 billion: The estimated valuation of the acquisition deal.
• 31,000: The number of employees in PricewaterhouseCoopers' management and information technology consulting practice.
• 1,500: The number of partners in PricewaterhouseCoopers involved in the sale.
• 150,000: The global total employees of PricewaterhouseCoopers.
• 10,000: The global total partners of PricewaterhouseCoopers.
• 200: The number of consultants hired by Hewlett-Packard each month to build its consulting business.
• 38,000: The number of consultants in Compaq's Global Services Group.

Sources:

• "PricewaterhouseCoopers confirms talks with Hewlett-Packard" - B.L. (No date given)
• Bloomberg News (No date given)
• Business Week (No date given)
• "Hewlett-Packard to Buy Consulting Unit for $17 Billion" - Eric Friedman and Gretchen McKay (No date given)
• "HP buys PwC practice for $17-18 billion" - David M. Halperin (No date given)