Merger activity in the oil and financial services industries could lose KPMG two major audit clients, it emerged this week.
The firm will be comforted, however, by winning the lucrative audit contract for newly merged property giant Jones Lang LaSalle in the US.
Formed by a link-up between Jones Lang Wootton, a private UK business owned by partners and staff, and US-based LaSalle Partners, the company will have 6,000 employees in 34 countries.
In a blow to the firm, though, a senior source within the finance department at fund manager M&G Group confirmed that the takeover of the company by Prudential would be a ‘catalyst’ for a review. PricewaterhouseCoopers, the auditor of Prudential, has emerged as a likely candidate to take over the chief auditor role.
The source said: ‘We have been with KPMG since 1993, so it is probably about time for a rethink. We would be very surprised if being part of Prudential did not prompt some movement.’
He added that PwC already works with the company on a number of M&G’s unit trusts and a decision could be made over the next year.
The Prudential’s corporate finance manager David Doyle said that, with the current plans, it was hoped the deal would be completed by June. He added that, although it was too soon to consider M&G’s auditors, it would be a matter for consideration.
In the oil industry, the prospect of a beauty parade between KPMG and Ernst & Young moved a step closer last week as Enterprise Oil confirmed it was still in merger talks with rival Lasmo. A merger would create a combined oil group valued at around #2.3bn. Enterprise uses KPMG, while Lasmo is an E&Y client.
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
In our latest managing partner Q&A looking towards 2017, CVR Global's Richard Toone talks about recruitment, and the potential threat of competition from the legal sector, as key issues for the firm in the coming year
Deloitte to avoid tendering for government contracts over the next six months, to appease Theresa May following consultant's report that painted a less-than-flattering picture of Brexit plans
In our first Q&A looking towards 2017, Menzies senior partner Julie Adams flags up increasing digitisation, aligned with more hands-on consultative services, as the key mix for her practice