PricewaterhouseCoopers (PwC) is planning to absorb Booz & Company in the latest move towards consolidation in the management consultancy sector.
The two groups announced yesterday that they had signed a conditional merger agreement. The deal is subject to approval by Booz’s 300 partners, who will vote in December. Neither group would disclose the value of the transaction.
Medium-sized consulting firms such as Booz are under pressure as clients seek advisers with either global scale or specialised skills.
PwC, one of the big four professional services firms, had been talking about a potential link-up with Booz for nine months, but other companies, including Accenture, had reportedly also expressed an interest. Partners at Germany's Roland Berger, another strategy consultant, have also been considering whether their firm has an independent future.
PwC umbrella
Booz, which was founded by Edwin Booz in 1914, will give up its name as part of any deal and trade under the PwC umbrella. Booz Allen Hamilton, a US government consulting business, was hived off from the general consulting arm in 2008.
Booz’s partners, part of a total workforce of 3,000 personnel, will join PwC’s advisory practice, which has revenues of $9 billion. The consultancy said yesterday that it had no partners or staff based in Ireland.
Their strategic advisory experience should add weight specifically to the bigger group's strategy practice, which has 130 partners. Dennis Nally, chairman of PwC International, said the combination would give the group the opportunity to "provide services from strategy development right through to execution".
Chequered history
Cesare Mainardi, chief executive of Booz, who has been leading the merger talks with the board and executive committee, said in a statement that the combined group would "help reinvent management consulting for the next century".
Consulting deals have a chequered history, however, because of the potential for culture clashes. In 2010, talks between Deloitte and Roland Berger collapsed after the partners at the German group decided to go it alone. Merger talks between Booz and AT Kearney, another management consultant, failed to bear fruit in 2010.
But earlier this year, Deloitte bought Monitor, the strategy house co-founded by Michael Porter, the Harvard management expert, out of bankruptcy. – (Copyright The Financial Times Limited 2013)
