French Atos buys two KPMG consulting units

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French Atos buys two KPMG consulting units

Atos Origin of Paris has agreed to buy KPMG International's consulting units in the UK and the Netherlands for €657m (£423m).

The purchase gives Atos Origin a strong presence in the UK and Netherlands markets, bringing combined revenues of €600m (£386m) and 2,800 employees, the company said.

With the acquisitions, Atos will have a total of 30,000 employees in more than 30 countries and will offer high-end business consulting, systems integration and managed outsourcing services, Atos Origin said in a statement yesterday.

"We announced two years ago that we wanted to strengthen our consulting business and our European base, particularly in the U.K., and that's what we're doing now," Atos Origin spokeswoman Marie-Tatiana Collombert said, adding that the deal should be completed by July.

KPMG's decision to sell off the consulting units is partly based on criticism of the audit and accounting industry and the relationship between audit and consulting services, and partly on the need for capital in order to grow, said Gavin Houlgate, a KPMG spokesman based in London.

Auditing services have come under criticism largely because of events in the US, where the Securities and Exchange Commission (SEC) acts as a watchdog over rules that prevent auditing companies from engaging in other business with companies they audit.

These rules have come under increasing scrutiny since the collapse of energy trading company Enron, and investigations into its relationship with auditor Arthur Andersen.

In the US, KPMG International has already spun off IT consulting services into a separate company, KPMG Consulting, based in the US, which no longer is affiliated with its former parent.

The consulting unit of KPMG International's German arm is also for sale, and discussions are under way with interested parties.

Atos Origin is not prepared to comment on any further acquisition plans.

Atos Origin will pay €422m (£272m) in cash for the KPMG businesses, and 3.7 million bonds, worth €235m (£149m), that will be redeemed for Atos Origin shares a year after issue, the company said.

The company's biggest shareholder, Koninklijke Philips Electronics, has approved the acquisition, Atos Origin said.

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