It services and management consultancy giant Cap Gemini is set to take-over the consultancy arm of global accountants Ernst & Young (E&Y).

The two parties have been in talks since November and a bid has now been made.

Under the deal, Cap Gemini will issue new shares in exchange for the E&Y consulting businesses in the respective countries taking part in the transaction.

If successful, Cap Gemini will issue a maximum of 43.5 million new shares and pay £229m to Ernst & Young partners.

Cap Geminin would take over 18,000 E&Y staff who generated revenues of around £3.5bn in 1999.

Cap Gemini receives 23% of its revenue from the financial and insurance sector while Ernst & Young's consultancy arm earns 14% of its revenue from finance and insurance.

If all E&Y consulting entities accept, voting will take place over the next few months in phases.

Initial voting will be carried out in Ernst & Young consulting businesses in the United Kingdom USA, Canada, Germany, France, Spain and Italy.

Other countries are expected to follow, including Sweden, Norway, Finland, Denmark, The Netherlands, Belgium, Australia and New Zealand.

A spokeswoman for Cap Gemini said that no announcement had yet been made about any possible redundancies which might take place once the takeover has been completed.