Cap Gemini SA and Ernst & Young announced on February 29, 2000 that they had reached agreement on the terms and conditions for the $16.2 billion sale of Ernst & Young’s consulting business to Cap Gemini. Under the terms of the agreement, Cap Gemini will issue a maximum of 43.5 million new shares and pay Euro 375 million for the consulting businesses, which are spread throughout the world. Subject to market conditions, up to a maximum of 50 per cent of the Cap Gemini newly issued shares will be sold by April 1, 2001. Of these shares, a minimum of 25 per cent will be sold on closing of the deal, to cover certain tax, pension and other liabilities of the Ernst & Young partners. The remaining shares will be subject to retention and forfeiture agreements over 5 years and any disposals based on an orderly marketing agreement.
For the Canadian portion of the transaction, Doris Stamml and Elizabeth Kiss of Ernst & Young are managing the deal in-house with assistance from Beth DeMerchant and William Charnetski at Torys. Jean-Marc Huot and Kevin Kyte of Stikeman Elliott Montreal represent Cap Gemini, with assistance from Frédéric Harvey on tax, and corporate support from Michel Gélinas and Patricia Brissette.