Group A firms to merge

Group A rivals Moores Rowland and Kidsons Impey are in merger talks to create the UK’s ninth largest accountancy firm.

The firms confirmed on Tuesday they were talking, but denied suggestions from insiders that proposals for a merged firm would be put to a vote of partners in the next fortnight.

The move follows claims by the new head of operations at Baker Tilly, Raymond Blin, that most Group A firms will be lucky to survive into the next century.

Blin, poached last month from Pannell Kerr Forster, predicted the top 20 firms outside the Big Six, commonly known as Group A, would be unable to keep pace with the changing needs of business and competition from niche firms.

He added that firms which lacked a national structure and contained an ageing group of partners would be first in line for takeover.

Moores Rowland has suffered a series of high-profile defections from its tax practice over the last six months which has dented the firm’s reputation for offering high-level tax advice. Kidsons has spent the last two years remodelling itself as an adviser to the owner-managed business community.

Peter Douglas, Kidsons national managing partner, confirmed the firm was in discussions with Moores Rowland regarding a possible merger.

‘This is new ground for both of us and negotiations are at an early stage.

If the discussions go well, a recommendation will be put to the partners of both firms but we are some way from that.’

He added: ‘From time to time, there are discussions with different firms and that fact creates uncertainty and nervousness, so we will get to a position where we know if we can move ahead as quickly as possible.’

Kidsons has 140 partners in 29 offices and generated fee income of #60m, while Moores Rowland has 90 partners in 17 offices with fee income of just over #30m.

Clive Weeks, managing partner at Moores Rowland, denied the talks were spurred by defections from the firm. ‘We have been talking with other firms about mergers for some time,’ he said.

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