SV News Service
Palo Alto, Oct 31
In a move that, in the short term will undermine Carly Fiorina’s leadership as CEO of Hewlett-Packard, the $ 18 billion merger with the consulting unit of PricewaterhouseCoopers (PwC)she engineered in September appears dead in the water. HP is reportedly having second thoughts about the deal, which raised plenty of eyebrows when it was announced.
Fiorina conceded this week that the company is re-evaluating the purchase in terms of both the huge price tag and the value the unit would bring investors. “Given the current market environment, we’re re-examining every aspect of the transaction, including price.”
The report of HP backing away from the merger comes after weeks of growing concerns in the investment community about the challenge HP would face in integrating the PWC unit. Also, many were concerned that many of PwC’s top consultants, the unit’s biggest asset, would simply leave, not wanting to sacrifice their credibility by having to push the HP product line. And PwC customers would likely feel uncomfortable with the idea that their consultants would push an HP solution over an alternative that would likely suit their requirements better.
Concerns over the PwC acquisition have contributed to a 23 percent drop in HP shares since the deal was announced on September 11.
Fiorina insisted that the fundamentals of the acquisition remain sound. “The strategic rationale for this transaction remains compelling, but we won’t complete a transaction unless we’re certain that we can provide sufficient return to our shareowners.”