ARMONK (Reuters) - International Business Machines Corp. said yesterday it would buy PricewaterhouseCoopers Consulting for $3.5 billion in cash and stock, boosting slackening revenues in the computer giant's large services business.

This is the second major bid for the unit. In late 2000, Hewlett-Packard Co. pulled out of talks to buy it for as much as $18 billion. PricewaterhouseCoopers said at the time it would carry on with its plan to split itself into two. Under that plan, PricewaterhouseCoopers had initially hoped to raise as much as $7.5 billion to $9 billion, but its value has since dropped considerably with the tumbling stock market.

John Jones, an analyst with brokerage firm SoundView Technology Corp. said IBM was taking advantage of the low valuation of computer services companies. "IBM is being very opportunistic given the attractive valuations in the services segment right now," he said. "It's buying up a quality company for a very attractive price."

IBM shares edged lower after the announcement, slipping to $71.26 in after-hours trading.