Next week’s merger of Price Waterhouse and Coopers & Lybrand will go ahead in Europe only thanks to the last-minute resignation of Coopers’ Spanish chairman, whose opposition threatened to derail the deal.
Angel Luis Linares, head of the Madrid office, refused to agree to the merger and sources said he had sought to persuade fellow partners to join Arthur Andersen instead.
Linares resigned after a team of European executives from PW and Coopers went to Spain ‘to knock heads together’. The Swedish arm of Coopers also threatened to join Andersens, but has now decided to join the merged firm.
Andersen’s attempts to poach major offices now look likely to succeed only in South America, where it has already signed up the Coopers’ partnerships in Brazil and Chile.
A spokesman for Andersens conceded it was unlikely to poach any more offices outside South America, though he said negotiations would carry on ‘right up until the last minute’.
PricewaterhouseCoopers’ global revenues will top $15bn (#9.4bn), making it the largest professional services firm in the world. It will become the largest firm in the US if Andersens, which is the current number one, goes through with the expected divorce from its consulting arm later this year.
Opinion among UK finance directors remains divided on the merger, despite eight months of lobbying by the two firms. Hugh Collum, FD at Smithkline Beecham, said he was looking forward to an enhanced global service.
But Nigel Turnbull, FD of Rank Group and head of the technical committee of the 100 group of FDs, said he continued to see serious negative effects.
He said he was sceptical about Chinese walls and would take his business elsewhere if he thought conflicts existed.
‘We are unconvinced by their argument that they can manage conflicts of interest. We all know who our competition is and there are some of us who will try to avoid conflicts in the future rather than leave it to the firms to resolve,’ he said.
Senior management, page 2; Leader, page 12; Exclusive interviews, page 14.
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel