Hewlett-Packard (HWP) confirmed rumors it is in talks to acquire the consulting arm of PricewaterhouseCoopers (dossier) for $17 billion to $18 billion. The market dropped HP's market cap around 4 percent on Monday, because, according to an analyst quoted by TechWeb, "We don't have a lot to go on." The press in general didn't have a lot to go on and carried the story off in a number of different directions.
Some outlets stressed PwC's need to put distance between its auditing and consulting businesses. Information Week tied HP's potential deal directly to an upcoming SEC hearing on such potential conflicts of interest among the Big Five accounting firms. The Wall Street Journal's David P. Hamilton stressed the high-stakes nature of such a deal.
HP's backyard paper, the San Jose Mercury News, turned in the heftiest coverage. Writers Cecilia Kang and Joshua L. Kwan said that in beefing up services, HP was emulating Big Blue. The reporters talked to a marketing VP at Sun's enterprise services division, who came up with some advice for HP: "They should stick to hardware." But the Merc quoted HP's profitability figures for hardware and services - 7.3 vs. 9.8 cents on the dollar - to point out why HP will probably ignore its rival's friendly advice. And the Financial Times' man in Silicon Valley opined that HP's move was aimed squarely at local rival Sun.
The Merc quoted the New York Times in listing other potential buyers for the PwC consulting business: GE. IBM, Siemens (SI) and Microsoft (MSFT). The New York Times' Barnaby J. Feder looked to Compaq for an analogous merger that boosted enterprise consulting. Compaq's ingestion of Digital has produced a good deal of indigestion, and Feder quoted the company's VP of global services: "We expect that what these guys are going to find, as Compaq did, is that everything doesn't just fall into place."- Keith Dawson
HP Drooling Over PricewaterhouseCoopers
The Industry Standard
PricewaterhouseCoopers Talks to HP About Sale of Consulting Unit
Hewlett-Packard Is in Talks to Buy Consulting Unit
New York Times
HP in Talks to Acquire Consulting Giant
San Jose Mercury News
HP's Move for PwC Unlikely to Faze Investors
HP Confirms Talks for PwC Unit
Hewlett-Packard Bids for Consulting Unit in a Big Gamble to Revitalize Operations
Wall Street Journal
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