The surprise announcement last week that Deloitte & Touche is to merge with Andersen UK will affect, for better or worse, many careers at the two firms.
According to John Connolly, UK senior partner at Deloitte: ‘The enlarged firm will offer even greater development opportunities for all of our people.’ Many staff at the two firms will no doubt swallow such comments alongside a strong dose of cynicism.
But for Connolly at least, the deal represents a significant boost for this career.
When he took over as UK senior partner of Deloitte & Touche in 1999, the firm was at the bottom of the Big Five league table.
Following the announcement that Deloitte is to take on the partners and staff of Andersen UK (the word merger is carefully avoided), Connolly is set to become the senior partner of the country’s second largest firm.
His empire will encompass £1,415m of annual revenues.
He will be chief executive and senior partner of the enlarged firm, although some Andersen partners will join the board and executive team, and the firm will retain the Deloitte name.
Connolly, regarded by some as a bit of a bruiser, has spent his whole professional life with the firm. Earlier in his career he ran an office for the firm in the Middle East, was partner-in-charge of its Leeds office and a regional managing partner. Before taking up his current role, he was head of the London office and UK managing partner.
He is a corporate finance specialist and has worked on many mergers, experience that no doubt stood him in good stead for the negotiations with Andersen UK.
Maybe it was this that helped him keep the negotiations so hush-hush.
Rival player KPMG was widely expected to take over Andersen UK. Deloitte, on the other hand, stayed silent and its announcement of the deal last Wednesday took both the media and the accounting world by surprise.
Connolly has no doubt enhanced his reputation by seemingly being able to pull a rabbit out of a hat, and by getting one over on his rivals at KPMG, especially as the merger, if successful, will knock KPMG off its position as the UK’s number two firm.
But now that the deal is signed, Connolly faces the challenging job of making it work.
He will have to convince regulators that the deal is not so much of a threat to competition that they should block it.
He also has to convince staff that the merger can work. This may not be too hard. Andersen UK needs a home, and some Deloitte staff will be hoping their remuneration will be boosted to match the reputedly high levels of their new colleagues. Maybe his toughest job will be managing this expectation.
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