HP in talks to buy PricewaterhouseCoopers

HP in talks to buy PricewaterhouseCoopers

Hewlett-Packard confirmed on Monday that it's negotiating a possible deal under which HP would buy the global management and information technology consulting practice of PricewaterhouseCoopers LLP for up to US$18 billion in cash and stock.

The two companies haven't finalised the terms of a deal, "and significant issues remain to be resolved," HP said. But the computer and software vendor added that it and PricewaterhouseCoopers are considering a purchase agreement with a price ranging from $17 billion to $18 billion.

If it goes through, the acquisition will likely boost HP's revenue growth beyond the 15 per cent level previously forecast for the current fiscal year, according to the company. But the deal would be "mildly dilutive" to its earnings this year and "approximately neutral" to profits during fiscal 2002, which would be the first full year of operations for the combined entity.

PricewaterhouseCoopers has been one of the largest systems integrators for HP for several years, and the acquisition would allow the computer maker to provide its own consultants to help customers install new HP servers and workstations. But PwC also works as HP's independent accountant and auditor, a relationship HP said would probably be ended if a deal is worked out.

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