Cap Gemini to Purchase Ernst & Young Consulting

LONDON (02/29/2000) - French IT services company Cap Gemini SA has agreed to acquire almost all the consulting activities of Ernst & Young LLP, the companies announced today.

Cap Gemini will begin by acquiring the Ernst & Young Consulting businesses in the U.S., Canada, U.K., Germany, France, Spain and Italy, subject to a vote by the partners in the Ernst & Young businesses, Cap Gemini said today in a statement.

Combining the two groups' consulting activities would enable Cap Gemini to become a major player in the U.S., which should represent over one third of its revenues, the company said.

Ernst & Young Consulting businesses in Sweden, Norway, Finland, Denmark, The Netherlands, Belgium, Australia and New Zealand are expected to join the deal in the following weeks, the statement said.

If all Ernst & Young consulting businesses take part in the merger, Cap Gemini will issue a maximum of 43.5 million new shares and pay 375 million euros (US$365 million), Cap Gemini said in a statement.

The completion of the proposed merger is subject to approval by Ernst & Young partners, with votes counted country by country. The votes should be tallied by April, the companies said. Following the Ernst & Young vote, Cap Gemini shareholders will vote on the merger at the end of June.

Cap Gemini, in Paris, can be contacted at +33-1-47-54-5000, or at http://www.capgemini.com/. Ernst & Young LLP, part of Ernst & Young International, can be reached in New York City at +1-212-773-8338 or at http://www.ey.com/.

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