PwC has completed its acquisition of Booz & Company, a move that helps the professional services company grab a bigger slice of the Middle East consulting landscape.
The deal, which was announced as sealed today, will help to dovetail PwC’s expertise in operational consulting with Booz’s greater focus on strategy. In a move reflecting Booz’s strength in that area, it will change its name to Strategy&. The new entity will operate under the PwC network.
“We’re offering our clients in the Middle East and across the world something they can’t get anywhere else: a combination of strategy consulting expertise and a proven track record of delivery that draws on unrivalled global scale and experience,” said Hani Ashkar, a PwC Middle East senior partner.
PwC, one of the “big four” professional services companies, proposed the deal in October and partners in New York-headquartered Booz & Co approved the merger two months later. In a joint statement released today, both firms said all regulatory approvals and closing conditions surrounding the deal had been met.
PwC has operated in the Middle East for 40 years, employing more than 2,700 people across the GCC, Egypt, Lebanon, Libya, Palestine and Iraq. But after the sale of its consulting arm to IBM in 2002 it has been striving to rebuild a global focus on consulting, an increasingly more profitable business than its traditional line of auditing.
In the UAE, Booz & Co, became the first global management consultancy to open a regional office in 1993 – in Abu Dhabi – a move that helped it gain a head-start on rivals such as Bain & Co, McKinsey and Boston Consulting Group. Employing more than 500 staff in the region – making it the largest management consultancy in the Middle East – Booz & Co has secured key public and private sector contracts, while honing its expertise within priority areas for governments such as unemployment, chronic healthcare diseases and subsidy reform.
Joe Saddi, previously the global chairman of Booz & Company and a senior partner and managing director of the firm’s Middle East business, now becomes the senior vice president and managing director of Strategy& in the Middle East.
He said the deal would allow the clients and staff of the combined entities a “bigger, broader and better opportunity to connect strategy with impact”.
“Our combination with PwC enables us to offer our clients in the Middle East and across the globe the ability to develop and execute the right strategy – delivered by one trusted, experience and responsive consultant,” he said.
Mr Saddi said no jobs are threatened by the merger.
“It’s quite the opposite,” he said. “The rationale was in terms of realising synergies on clients and revenue. All the discussions we’ve had have been about how to create more jobs and grow the businesses.”
Along with fellow professional services companies KPMG and Ernst & Young, PwC retreated from consulting in about 2002 when US policymakers brought in regulations in the wake of the Enron accounting scandal. Firms were largely banned from consulting for audit clients, with some exceptions such as tax advice.
But more recently PwC has sought to rebuild its consulting operations as the market has recovered since the 2009 global financial crisis.
Fiona Czerniawska, a co-founder of Source, a specialist research company on the management consulting market, said in some respects the acquisition was a “bigger deal for the Middle East consulting market than it was globally”.
“Booz & Co is one of the dominant consultancy firms in the Middle East,” she said.
“PwC, like the other big four professional services firms, specialises in large-scale transformational projects and to do that they need to be able to offer both strategy and operational consulting. Booz & Co is more focused on the strategy side, and PwC on operational.”
PwC Strategy&’s broad of directors will be chaired by Tony Poulter, a PwC partner and global consulting leader. Cesare Mainardi, who has been the chief executive of Booz & Company for two years, becomes the chief executive of Strategy&.
