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Introduction - Facts from Acquisition
On October 1, 2002 International Business Machines (IBM) purchased PwC Consulting, which previously was the global management consulting and technology unit of PricewaterhouseCoopers. The purchase price paid by IBM was $3,474 million, which was paid in cash $2,852 million; in stocks $294 million; and the remaining $328 the company paid in convertible notes. According to IBM’s market research, it shows that business and IT strategies are intertwined like never before. ...
Our research focuses on the facts of IBM’s acquisition of PwCC with followings: information about each company involved in, objectives of acquisition such as the environment the companies faces as well as strengths each company brings, and effects of the acquisition through the changes in earnings and organization to show how the acquisition affected IBM. Finally, we will conclude with IBM’s stock performance around the period of completion.
Information about the Companies Involved
International Business Machine Corporation-IBM is one of the world’s largest information technology companies with more than 80 years of leadership helping business innovate. IBM Global Services is the industry’s largest business and information technology services provider, with about 180,000 professionals serving customers in 160 countries and annual revenue of $35 billion (2001). IBM Global services integrate a range of services, consulting, hardware, software, and research, to help companies understand the full value of information technology. 2002 purchase of PwCC was not the only acquisition by IBM that year. IBM achieved six acquisitions for software companies including Cross-worlds Software and Access 360; And five acquisitions for strategic outsourcing and business consulting companies, PwCC being the largest acquisition. ...
2002 purchase of PwCC was not the only acquisition by IBM that year. IBM achieved six acquisitions for software companies including Crossworlds Software and Access 360; And five acquisitions for strategic outsourcing and business consulting companies, PwCC being the largest acquisition. ... In the fourth quarter of 2002 IBM recorded liabilities of approximately $601 million to rebalance workforce and to check out of excess leased space in connection with PwCC acquisition.
Objective of Acquisition
IBM’s new strategy from its deep troubles of the early 1990’s has been on taking advantage of its broad range of products and services to put technology together to solve the business problems of corporate customers. ... This is precisely one of the main reasons that PricewaterhouseCoopers decided to sell it consulting units to IBM. ...
Pressure have been mountain on PwC to get out of the Consulting business in order to eliminated the perceived conflict of interest associated with auditing and consulting at the time. ... Furthermore, this was beginning to damage PwCC revenue, since PwC consulting revenue fell 13 percent to $4. ... The New York Times states like other consulting businesses associated with audit firms, PwC Consulting lost a large number of clients in the wake of accounting scandals that rocked United States financial market.
Approximate Word count = 2379
Approximate Pages = 9.5
(250 words per page double spaced)
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