EC approves IBM's bid for PwC
IBM’s takeover of PwC Consulting has moved a step closer after the European Commission (EC) ruled that the US$3.5 billion deal did not raise any competitive concerns.
IBM’s takeover of PwC Consulting has moved a step closer after the European Commission (EC) raised no objections. The Commission said that the US$3.5 billion deal did not raise any competitive concerns in the consulting sector.
IBM announced on 30 July 2002 that it had reached an agreement to buy the consulting arm of PricewaterhouseCoppers. After the takeover PwC Consulting would be incorporated into IBM and operate under the IBM name. The combined company would have around 18,000 employees and be the largest IT services company in the world.
The EC said that the takeover would not significantly alter the IT services market as IBM would only gain a marginal boost in market share. There would also be significant competition from other consulting firms, both globally and within Europe. The EC also said that IBM would not use the takeover to boost sales of hardware.
“While IBM is probably the supplier with the broadest range of IT products and services available in house, it could be excluded that the merged entity could gain market power through combined sales of packaged IT solutions since it holds no dominant position on any of these products or services,” said an EC statement.
“In view of these elements, the Commission concluded that the operation will not result in the creation or strengthening of any dominant position, and has decided to clear the
transaction,” the statement continued.