Technology giant IBM has agreed to buy the consulting arm of PricewaterhouseCoopers (PwC) for $3.5bn (�2.2bn) in cash and stock.

The move expands IBM's foray into the profitable corporate-services business.

[IBM's] buying up a quality company for a very attractive price

John Jones, SoundView Technology

It also kills the plan of renaming the unit "Monday" preparatory to a flotation - a move that had earned the firm a wave of derision earlier in the year.

As a result of the deal, PwC, the US's largest accounting firm, will no longer pursue its planned stock float for the consulting unit.

"It will unleash the consulting unit from the regulatory restraints of our industry, and will allow the business to reach its full potential," said Samuel DiPiazza, PwC chief executive.

'Good fit'

IBM said the deal made good sense.

"This is an extremely good fit - both strategically and culturally," said Doug Elix, senior vice president at IBM Global Services.

"Our businesses complement each other and we speak the same language."

The offer still needs approval not only from US regulators but from partners at PwC as well.

If it does go through, about 30,000 workers at PwC Consulting will join IBM's Global Services unit.

The division will concentrate on selling 'integrated business solutions', where consultancy is provided alongside the sale of computer hardware and software.

Bargain?

It is not the first time that a company has tried to buy PwC's consulting arm.

In 2000, Hewlett-Packard failed in an attempt to buy the business for as much as $18bn.

Analysts said IBM was taking advantage of low valuations in the computer services sector.

"IBM is being very opportunistic given the attractive valuations in the services segment right now," said John Jones, an analyst with brokerage firm SoundView Technology Corp.

"It's buying up a quality company for a very attractive price."