In a joint statement issued on Tuesday evening, the firms said: ‘Andersen Worldwide SC and KPMG can confirm that member firms of each organisation outside the US are continuing transaction discussions to explore the potential for a combination of their respective operations.
‘In view of the decisions by certain individual firms to pursue different directions, it is clear embracing all of the non-US firms is not achievable’.
The statement followed news on Monday that Spain had become the latest office to opt out of the KPMG deal by agreeing to link up with Deloitte & Touche. The decision came as a massive blow to KPMG as Andersen’s Spanish office is the largest Big Five presence in Spain and is seen as a crucial gateway to its South American business, which was worth $395m in 2001.
That compared with $4,488m in North America, $2,867 in Western Europe, $387m in Central Europe, Middle East, India and Africa and $1,199 in Asia Pacific.
Andersen spokespeople in London insisted the announcement by the Spanish firm had no bearing on whether its UK offices would link up with KPMG. But Andersen is now rapidly splintering in several directions. Andersen in Hong Kong and China have gone to PricewaterhouseCoopers while operations in New Zealand, Australia and Russia have gone to Ernst & Young.
A spokesman from Andersen in the UK, added: ‘We are disappointed the Spanish business has decided to join Deloitte & Touche, however talks are continuing to go ahead with KPMG in the UK and other countries.’
KPMG expressed ‘disappointment’ at the revelation as several partners met in London on Tuesday to discuss the firm’s next move.
A statement from KPMG said: ‘We are naturally disappointed that the Spanish firm of Andersen has decided to go to Deloitte & Touche. We continue to have very constructive discussions elsewhere.’
By Tuesday evening Andersen had not made any statement regarding the appointment of an interim CEO to succeed Joe Berardino, who quit as chief executive a week ago. Partner Lou Salvatore and former chairman of the Federal Reserve, Paul Volcker, have been tipped as a potential successors.
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