Aug, 2002 : IBM Asks for Clearance in PwC Consulting Buy
📅 - IBM reportedly asked the European Union on Thursday for antitrust clearance in its proposed $3.5 billion acquisition of the consulting arm of PriceWaterhouseCoopers LLP.
The EU now has until September 23 to decide whether to clear the deal or subject it to an in-depth probe that would last four months. That deadline can be extended by two weeks if the companies offer to resolve antitrust concerns through spin-offs.
IBM and PwC Consulting reportedly want to have the deal cleared without having to make any concessions, but observers question whether the strategy will work. IBM's information technology services business is already the world's largest, with 40 percent of the company's total revenue coming from its Global Services division. The acquisition of PwC consulting would only extend that lead, which could raise concerns over the dominance of the merged company.
The sale of PwC Consulting came about partly through concerns of a conflict of interest between the company's consulting arm and its operations as an auditor.
The EU's decision may hinge on how the IT services market is defined, with the deal having a good chance if regulators adopt a broad definition that includes corporate and government commissions. A narrower definition would likely result in tougher questioning for the companies.
The EU now has until September 23 to decide whether to clear the deal or subject it to an in-depth probe that would last four months. That deadline can be extended by two weeks if the companies offer to resolve antitrust concerns through spin-offs.
IBM and PwC Consulting reportedly want to have the deal cleared without having to make any concessions, but observers question whether the strategy will work. IBM's information technology services business is already the world's largest, with 40 percent of the company's total revenue coming from its Global Services division. The acquisition of PwC consulting would only extend that lead, which could raise concerns over the dominance of the merged company.
The sale of PwC Consulting came about partly through concerns of a conflict of interest between the company's consulting arm and its operations as an auditor.
The EU's decision may hinge on how the IT services market is defined, with the deal having a good chance if regulators adopt a broad definition that includes corporate and government commissions. A narrower definition would likely result in tougher questioning for the companies.
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URL source: http://www.thewhir.com/marketwatch/ibm082902.cfm
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