KPMG the loser as merger implodes

If Andersen is successful with its surprise plans to merge with Deloitte & Touche, revealed this morning, the two firms will form the second largest firm in the UK with combined fee income of £1,415m, according to figures from the most recent Accountancy Age Top 50 league table.

The loss of its prestigious second place position will be another slap in the face for KPMG, where senior partners will already be smarting from the news that rival Deloittes has beaten them to Andersen UK. KPMG had publicly stated that it was in talks to acquire the UK practice of Andersen, which is disintergrating in the wake of the Enron scandal.

A merged Deloittes/Andersen firm would be the second largest player in the UK, below the largest firm, PricewaterhouseCoopers, which has an annual fee income of £2,119m, but above KPMG at £1,160m. Ernst & Young would become the smallest of the new ‘Big Four’ with fee income of £626m.

The merger process would bring together around 850 partners and over 11,000 professional staff, according to the Accountancy Age Top 50 league table.

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