Accenture is seeking to sell its business operations in China. As the world’s largest listed professional services and management consulting company, Accenture aims to focus on its fastest-growing businesses and demonstrate to investors its ability to adapt to the changes brought by the artificial intelligence (AI) wave.
According to the Financial Times, sources revealed that after receiving expressions of interest from potential buyers over the past year, Accenture has hired JPMorgan to conduct a strategic assessment of its operations in China. They added that the valuation of the entire Greater China region business could reach as high as $1.5 billion. Accenture did not respond to requests for comment, and JPMorgan also declined to comment.
Insiders suggest that this sale plan may attract interest from private equity firms and a few strategic buyers. Accenture may also choose to retain a minority stake in the business to help ensure continuity of client services. It is not guaranteed at this stage that this strategic assessment will ultimately lead to a transaction.
As Accenture considers selling its Chinese business, its stock price has fluctuated significantly in recent months, with investors divided on whether the company will emerge as a winner or loser in the AI wave. Investors skeptical of Accenture’s prospects believe that AI may lead major companies to reduce their reliance on external consulting firms and instead use AI to complete tasks previously outsourced. Accenture, on the other hand, is betting that the demand for its consulting and related services will increase as companies introduce and deploy AI technologies.
During an “Investor and Analyst Day” event on Wednesday, October 14, Accenture told investors that it expects modest revenue growth over the next two years, but as the market demand for new AI services begins to surge, the company’s revenue growth is likely to accelerate towards the end of the decade.
At the event, Accenture also outlined a long-term growth strategy. CEO Julie Sweet stated that the company anticipates AI creating new demand. She likened the current AI development wave to past technological transformations such as offshoring, cloud computing, and digital services, highlighting how Accenture responded to those changes by investing in new capabilities and expanding market share.
The funds generated from selling the Chinese business could prove useful. Accenture also plans to reinvest some of the internal operating costs saved through AI technology back into its business, including controlling fees charged to clients and making acquisitions to expand its AI service offerings. Meanwhile, Accenture has pledged to maintain debt at a moderate level and return significant cash to shareholders through share buybacks and increased dividends.
Chief Financial Officer Angie Park briefly hinted towards the end of the investor event that the company may raise funds by selling off some of its businesses.
She mentioned that Accenture has in the past exited businesses, service offerings, national markets, and contracts that no longer aligned with the company’s strategic goals or return thresholds.