Cap Gemini to Buy Ernst & Young’s Consulting Unit
PARIS — French computer and management services company Cap Gemini said Tuesday that it is buying Ernst & Young’s consulting unit for about $11 billion in a stock-and-cash deal that would give it a major foothold in North America.
The deal would double the size of Cap Gemini, which has been flush with cash since posting a 41% increase in net profit last year.
New York-based Ernst & Young would become the first major U.S. accounting firm to sell its consulting business. The sale would give it a hefty infusion of capital and could remove a potential regulatory problem with U.S. authorities.
The Big Five accounting firms have been under pressure from the Securities and Exchange Commission to eliminate conflicts of interest between operations that audit firms’ books and consulting businesses that sell services to those clients.
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