By Julian Goldsmith, 7 December 1999 17:21
NEWS Cap Gemini is rumoured to be taking over Ernst and Young's (E&Y) management consulting arm. According to reports in the Wall Street Journal, the deal is worth a staggering $4.8bn. A spokeswoman for Cap Gemini has confirmed that the two companies were in high-level talks which could lead to a merger. The E&Y business unit specialises in Internet consultancy, which has enjoyed good returns in the wake of the growth of this sector. However, it is believed by commentators that the move would be driven by pressure from financial regulators to separate public company auditing businesses from consultancy contracts. The move is also seen as an attempt by Cap Gemini to secure a market share in the US. Should the deal go through, a 17,000 strong workforce will change hands.
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