GLOBAL – Mellon Financial Corp. is selling its human resource-consulting arm for $40m (€31.9m) less than expected – resulting in a loss of more than $100m on the deal.
Pittsburgh-based Mellon said it has completed the previously announced sale of the division to Affiliated Computer Services.
Mellon said in March that it had a definitive agreement to sell the Human Resources consulting and outsourcing businesses of its Human Resources & Investor Solutions (HR&IS) sector to ACS. It said then that it would record an after-tax loss in the first half of 2005 of around $75m.
The move would allow it to concentrate on asset management and securities services.
But now the sale price has been reduced to $405m from $445m due to “sluggish HR consulting revenues”.
It said today: “This will result in an expected after-tax loss on the transaction of approximately $105m, which will be reflected in discontinued operations.”
"This transaction sharpens our focus on our strong positions in asset management and payments and securities services," said Mellon chief executive Martin McGuinn.
Under the terms of the deal, Mellon will retain certain relationships with ACS, such as fund management and securities services. Mellon will keep Mellon Investor Services.