LONDON: PricewaterhouseCoopers (PwC), the world's largest accounting and
consulting firm, has set July 1 as an internal deadline for the legal separation
of its consulting and audit arms, the Financial Times reported on Thursday.
Senior partners are understood to be concerned that some staff doubt the firm
still intends to split off its consulting arm after the collapse of talks with
Hewlett Packard last year, and believe an internal legal split would demonstrate
its will to carry out the plan.
Hewlett Packard withdrew from talks to buy the consulting arm because of its
weak share price. The deal would have valued the consulting business at about
$18 billion, though the market has weakened in the interim period.
The Financial Times Web site quoted people close to the negotiations as
saying, suitors to replace Hewlett Packard had dwindled, and that senior
partners were looking instead to an initial public offering.
PwC should be encouraged by a better-than-expected debut for rival KPMG
Consulting Inc, which was launched on Wall Street earlier this month. An
internal split is expected to bolster PwC's confidence and reverse a high rate
of departures from the firm.
Professional services firms often have to replace 20 per cent of their staff
each year but PwC's turnover at some levels has been nearer 30 per cent.
(C) Reuters Limited 2001.