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IBM, PricewaterhouseCoopers Complete Sale of PwC Consulting

New Group, IBM Business Consulting Services, to Help Clients Drive Greater Business Returns

ARMONK, NY AND NEW YORK, NY - 02 Oct 2002: IBM and PricewaterhouseCoopers today announced IBM's acquisition of PwC Consulting, the global management consulting and technology services unit of PricewaterhouseCoopers. The deal was overwhelmingly approved by PricewaterhouseCoopers member firms and partners globally, and has received all regulatory clearances including in the United States and the European Union. Under terms of the transaction, IBM has paid PricewaterhouseCoopers approximately $3.5 billion in cash and stock.

The combination creates a new global business unit, IBM Business Consulting Services, comprising more than 30,000 IBM and 30,000 transferring PwC Consulting professionals. As a result, IBM Business Consulting Services becomes the world's largest consulting services organization, with operations in more than 160 countries. IBM Business Consulting Services will be part of IBM Global Services.

"This union creates a new category in the consulting field. We've combined two organizations with complementary skills and cultures, and which share a vision of fusing business insight and technology in a way that can significantly benefit a client's bottom line," said Ginni Rometty, General Manager, IBM Business Consulting Services. "Together, we can offer the world's most complete range of consulting services. Combine that with the full range of IBM services, infrastructure, technology and financing resources, and you have the integrated business technology solutions that many of our clients are now demanding."

Samuel A. DiPiazza, Jr., chief executive officer of PricewaterhouseCoopers, said, "With the closing of this sale, PricewaterhouseCoopers effectively completes the reorganization we began more than two years ago, and fulfills our commitment to unleash the consulting unit from the regulatory restraints of our industry. Combining PwC Consulting with IBM fully achieves the goals we set for the separation and it provides clients and our professionals with greater opportunities and access to innovative solutions. We wish our former colleagues all the best."

Following the July 30 definitive agreement, IBM and PwC Consulting assembled a transition team of more than 600 professionals to plan for and manage all aspects of the expected integration of more than 60,000 client service professionals and staff. As part of this process, Business Consulting Services has determined that it will adopt IBM's sector and industry segmentation, and PwC Consulting's key solution areas, facilitating rapid and seamless integration.

Concurrently, IBM has named three geographic leaders for the new Business Consulting Services organization: Mike Collins, General Manager, Business Consulting Services--Americas; David Dockray, General Manager, Business Consulting Services--Europe, Middle-East and Africa; and Hideki Kurashige, General Manager, Business Consulting Services--Asia Pacific. Messrs. Collins and Dockray were previously theatre managing partners of PwC Consulting. Kurashige-san was previously CEO of PwC Consulting in Japan. All three leaders will report directly to Ms. Rometty.

Increasingly, companies are considering new ways of running their businesses such as business transformation outsourcing, and utility-based computing. These new business models require strategic business consulting skills, expertise in specific industry issues, an understanding of key solution areas such as customer relationship management, supply chain and financial transaction management--all areas in which PwC Consulting has been a recognized leader. These skills need to be combined with large-scale implementation capabilities such as outsourcing, IT infrastructure skills, key technologies, and financing, where IBM is the market leader. IBM Business Consulting Services is now uniquely positioned to advise and enable clients to fully leverage these new models of business computing, driving greater return on IT investments.

IBM plans to use Ernst & Young to audit its Business Consulting Services unit.

Contact(s) information

Ian Colley
IBM Media Relations
(914) 499-6532
colley@us.ibm.com

Steven Silber
PricewaterhouseCoopers
(646) 394-4059
steven.g.silber@us.pwcglobal.com

Sehra Eusufzai
PwCC Consulting
(646) 598-2470
sehra.k.eusufzai@pwcglobal.com

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