Having told the world it had entered into talks with rival KPMG and was confident of completing a deal as soon as possible, only four weeks later the firm stunned the accountancy and business world by revealing it had instead hopped into bed with Deloitte & Touche.
At the time of the KPMG discussions, Andersen UK senior partner John Ormerod said the firm had a plan B in place – now we can all see what he was referring to.
This time, the merger of the two firms looks like a done deal. Ormerod this week told Accountancy Age, it was.
‘The difference between the two announcements, was that we confirmed talks with KPMG, while we have confirmed an agreement with Deloitte & Touche. Our partners believe this is the best way forward for the firm – we don’t have any plan Bs.’
However, only a few weeks ago, the best option was KPMG, while it is believed similar discussions with Ernst & Young never really had a chance to come to fruition due to the speed of Deloitte.
So confident is Ormerod of the deal, that he does not believe the EU, OFT, DTI or the FSA will find any reasons to prevent the merger.
Although his own position in the new firm is unclear, an upbeat Ormerod was clearly delighted with the progress Andersen had made. ‘We managed to find agreement with Deloitte & Touche within a matter of eight or nine working days,’ he said.
It is clear the talks between Andersen and KPMG disintegrated over potential liability issues, something Deloitte appears to have overcome.
Ormerod insists that despite reports to the contrary, Andersen decided its own future and wasn’t backed into a corner.
‘There is a PR war going on out there,’ he says, but he adds that right up until the end of discussions with KPMG, his firm was in control of its own destiny.
Quite how Mike Rake took the news, we can only guess. ‘That is a question you will have to ask him’, Ormerod says. Although any frustrations were likely to be tempered with a certain amount of relief that KPMG is once again free to concentrate fully on its own business.
Ormerod is also confident that with Deloitte snapping up parts of Andersen around the world – almost to the point where Deloitte may end up achieving something close to a global merger of its own – that this will not prevent any deal in the UK going ahead.
And what is certain is that there is admiration on Ormerod’s part for the man who is going to head up the new larger Deloitte – John Connolly.
‘We had met several times at various UK institute events before these discussions. In terms of negotiations with him, I have found him to be a fantastic businessman,’ he says.
If there are any unresolved liability issues concerning Enron, Connolly will certainly need those skills in abundance.
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
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