IBM won permission from the European Commission today to buy PricewaterhouseCoopers Consulting for $3.5 billion in cash and stock.
The merger gives IBM, the world's largest supplier of computers and computer services, the consulting arm of PricewaterhouseCoopers, the world's largest accounting firm. The combined IBM-PricewaterhouseCoopers will rank a close second to top consultant Accenture, formerly Andersen Consulting.
"A careful analysis of the transaction has shown that IBM's share of the IT services market will not be significantly altered and that consumers will continue to benefit from sufficient choice and innovation in the sector," the Commission said in a statement.
The Commission said IBM's post-merger share of the market for IT services would not give rise to competition concerns given the marginal nature of the market share additions from PwC Consulting and the significant number of global competitors.
The Commission also said that although IBM was probably the supplier with the broadest range of IT products and services available in-house, there would be no big gain in market power through combined sales of packaged IT solutions as it had no dominant position in any of these products or services.
IBM's service business, which employs about 150,000 people, will take on 30,000 new staff with the acquisition.