He noted that in 1998 the Commission effectively blocked a deal between KPMGand Ernst & Young that would have reduced the number of world-wideaccountancy firms from five to four and ‘the Commission’s attitude has notchanged since then.’
The official also recalled that when Price Waterhouse merged withCoopers & Lybrand in 1998 the Commission had expressed concerns that’further consolidation among the Big Five could seriously harm competition.’
The proposed Andersen/KPMG deal would easily meet the Commission criteriawhich gives its competition authorities the right to intervene when a mergedfirm’s world-wide turnover exceeds Euro 5 billion of which more than Euro250 million in the EU.
Brussels said today it had not had any formal notification of the deal. Oncethis was received it would take a month to assess whether or not toinvestigate. The probe itself, if carried out, would take up to four months.
The Commission could approve the deal under certain conditions, officialssaid. It could insist on some hiving off of operations in some EU countriesto bring about a balance. This could be done through management buy-outs orsales to other accountancy firms.
Andersen itself has expressed the hope that the deal could be backed on thegrounds that it reflected ‘exceptional arrangements in exceptionalcircumstances’ but this is not an argument likely to find favour inBrussels. The firm would have to show that KPMG is the only viable buyer andthis could be difficult.
Richard Cartwright becomes the new head, taking over from incumbent head of office David Lemon
Brian Burke, business development director, has moved within the firm to 'develop Quantuma’s networks with Sussex professional firms'
Stephen Mills joins the Manchester office from IBM, where he spent 12 years as an associate partner in the data, analytics and cognitive consulting group
Rupert Guppy will be responsible for capital allowances in the southern region, and joins the firm from specialist consultancy E3 Consulting