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ICG and Andersen merge e-procurement units

ICG's (Nasdaq: ICGE) commerce division and Andersen Consulting's e-procurement venture, ePValue, said they would merge Wednesday to create a comprehensive e-procurement services provider. The new venture will operate under the ICG Commerce name.

Shares in the incubator closed down 0.69 to 9.38 Tuesday. The company's stock has fallen on hard times lately as have the companies it incubates.

The deal will incorporate key operating and investment commitments by Andersen Consulting, Sun Microsystems (Nasdaq: SUNW) -- a strategic partner in and an equity owner of ePValue -- and ICG Commerce.

In conjunction with it, both AC Ventures, the venture capital unit of Andersen Consulting, and Sun Microsystems will gain equity positions in the expanded ICG Commerce. It will also combine ePValue's multinational operations in North America and Europe and $20 million in current annual revenues with ICG Commerce's existing operations. The merged entity will have over $10 billion in actual purchase transactions. ICG Commerce's president and CEO, Rick Berry, will take the reins.

Sara Lee Europe, the combined entity's first customer with about $1 billion in indirect spending, will also take an equity stake in ICG Commerce.

The deal is expected to close within 45 days pending execution of definitive agreements and governmental approval.