An Assessment of Cap Gemini's Cross-Border Merger With Ernst & Young Consulting

Maihotra, Ayesha; Pierroutsakos, Alex
June 2005
Multinational Business Review (St. Louis University);Summer2005, Vol. 13 Issue 2, p107
Academic Journal
Cross-border mergers are rising in number and scope even though, on average, firms do not profit from them. In this article, we use interviews and secondary data to assess a historic merger between two global consulting giants - Cap Gemini and Ernst & Young Consulting. The two firms had well-articulated strategic reasons for merging. Nevertheless, their integration strategy failed to address key differences in business models, core competencies, and organizational practices. As a result, the combined firm suffered five years of diminished financial and competitive performance. Our study highlights the organizational complexities affecting mergers between human capital-intensive firms.


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