French technology services firm Cap Gemini yesterday agreed a stock and cash deal to take over the consulting arm of accountants Ernst & Young to create a global leader in consultancy and IT services.

If all Ernst & Young Consulting entities participate in the transaction, its auditing and consulting partners could hold about 36 per cent of the combined group's equity.

The initial agreement covers Ernst & Young Consulting businesses in the US, Canada, Britain, Germany, France, Spain and Italy. Mr John Hogan, managing partner, Ernst & Young Ireland, said discussions in relation to the Irish practice were expected to be concluded over the next few weeks. A spokeswoman said there were 37 partners in the Republic.