PwC in talks to sell consultancy

PriceWaterhouseCoopers, the world's second biggest accounting firm, yesterday confirmed it was in talks over the possible sale of its consulting arm to Hewlett Packard.

PriceWaterhouseCoopers, the world's second biggest accounting firm, yesterday confirmed it was in talks over the possible sale of its consulting arm to Hewlett Packard.

The negotiations are thought to value PwC's consultancy division at about $18bn (£12.6bn). PwC, which has also met other interested parties, including IBM, yesterday refused to say whether the talks have become exclusive with the California-based computer and printing business.

The proposed deal, which would be the first major purchase made by Hewlett Packard since Carly Fiorina became chief executive, is expected to take weeks to complete. PwC will have to hold talks with partners worldwide.

The news follows moves by all of the Big Five firms apart from Deloitte & Touche to separate off the parts of their business offering IT, management and tax consultancy. Arthur Andersen maintains a small business consulting practice, but it split from the much larger Andersen Consulting in July.

This split and that of Ernst & Young, as well as KPMG's plans for its consultancy, follow proposals by the US regulator, the Securities and Exchange Commission, to make the division compulsory. This is due to fears of a conflict of interest as firms have to audit actions that may be based on advice they have given. A decision is expected in the next few weeks.