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GM, Andersen in pact
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November 19, 1999: 4:40 p.m. ET
Andersen buys GM's accounting systems, will market services to other companies
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NEW YORK (CNNfn) - Arthur Andersen, the world's second largest accounting firm, and General Motors Corp. are joining forces to offer some of GM's accounting services to other companies.
Under an agreement announced Friday, GM (GM) is selling the processes and systems it has used to handle about $250 billion annually in payroll, accounts receivable and other financial transactions to Arthur Andersen for an undisclosed sum. Andersen will provide those services to GM for $250 million over the life a 10-year contract. The contract, while large, is only a fraction of $7 billion a year in revenue at privately held Andersen.
What is unusual about the agreement is that Andersen will offer the services to other clients, with GM getting a payment for growth in that business. GM will assist Andersen in marketing these services. The two will target multinational companies as possible clients.
"This is what Andersen does best. We believe they can grow this business," said Linda McGill, a spokeswoman for GM.
There are 400 GM employees affected by the transaction. All will be offered employment with Andersen under the agreement, McGill said.
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