PwC 10-year anniversary special report

by Paul Grant

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26 Jun 2008

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On the 1 July 2008, PricewaterhouseCoopers celebrates 10 years since it came into being, following the merger of Price Waterhouse and Coopers & Lybrand. At the time, this mega-merger was highly controversial, upsetting both clients, FDs and the rest of the profession. It sparked other merger attempts among the then Big Six and huge resistance from many international affiliates of the two firms involved.

A decade on and the firm is on a sound footing, standing above its rivals in the Accountancy Age Top 50 with fee income beyond £2bn a year, but it wasn't always plain sailing and the merger had a huge impact on the rest of the profession.

This special report explores the long-term implications of the profession's biggest merger and relives how the union came about ten years ago

The implications:

PwC: ten years on

Boyle brands PwC merger 'unfortunate'

PWC: is it too big for its boots?

Competition concerns were all too predictable

Will PwC's next ten years be as profitable?

The history:

September 1997

Coopers & Lybrand and Price Waterhouse announce plans to merge, creating the UK's largest firm and reducing the Big Six to a Big Five, but their clients are not happy.

October 1997

In a direct response to the threat posed by thier rivals, Ernst & Young and Deloitte also announce a merger strategy, potentially reducing the number of largest firms to just four. Corporate FDs are displeased by the move.

November 1997

Coopers & Lybrand deny that the merger will mean the loss of 850 partners.

December 1997

Partners at both firms approve the merger plan but it needs to clear EC hurdles first

February 1998

Following a probe of the audit market by the EC, E&Y and Deloitte abandon their plans to merge, prompting 'jubilant' reactions from Coopers and PW. Ian Brindle, then senior partner at PW said the collapse lifted 'the shadow of an ugly spectre' from their own merger plans but admitted that jobs would go.

March 1998

The two firms are hit by objections from the EC to the merger, but still expect the union to be approved.

April 1998

Concerns from several European competition authorities on the concentration of audits in the banking and insurance sector threaten to throw a spanner in the merger works

May 1998

The firms decide on the new name for the merged business – PricewaterhouseCoopers

June 1998

Final preparations are underway. A new board is announced that shares power equally between the two firms, partners are anticipating a windfall bonus from the merger and one last hurdle is removed with the resignation of Coopers' Spanish chairman whose opposition had threatened to derail the deal. But some believe that partners will always see themselves as belonging to Coopers or PW.

July 1998

PricewaterhouseCoopers officially comes into existence, but many partners are left in the dark over their new positions and several of Coopers' international affiliates defect to other firms, including Brazil, Chile, Zambia and Zimbabwe.

September 1998

PwC is confirmed as holding more listed audit clients than any other firm

November 1998

Following the merger, PwC admits that it has lost three major clients to rivals, including Abbey National and Diageo, with others reviewing their audit arrangements.

February 2000

PwC announces plans to split the firm up, with the audit, tax and business advisory business being separated from management consultancy and other services.

August 2002

Following a short-lived relaunch as Monday, PwC Consulting is sold to IBM for $3.9bn

September 2007

PricewaterhouseCoopers becomes the first UK firm to achieve turnover of more than £2bn in a year, growing more than 50% since the combined firm first posted £1.3bn fees in our 1998 Top 50 survey

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