PracticeAccounting FirmsBig Five merger suffers further blow

Big Five merger suffers further blow

The fragmentation of Andersen's worldwide network continued this morning with news that its New Zealand office will not be joining the merger with KPMG but will instead go over to Ernst & Young.

Yesterday Andersen’s offices in China and Hong Kong revealed they are to join PricewaterhouseCoopers rather take part in a global merger with Big Five rival KPMG. Later in the day it emerged that Ernst & Young had taken Andersen’s Russia operation.

On Tuesday Andersen announced in London that it was to merge all its non-US operations with KPMG but the recent defections will come as a blow to those efforts.

A statement put out by Andersen expressed disappointment that the defectors had decided not to stay on board the merger and the loss of China, the world’s largest emerging market, will represent a blow to KPMG.

However, there was also dwetermination that the merger plan would not be derailed.

Andersen Worldwide said: ‘Andersen Worldwide is currently negotiating a combination of its non-US member firms with KPMG, and regrets the announcement by member firms in China, Hong Kong and Russia that they intend to pursue a combination with another firm.

‘Their decision will have no impact on the continuing effort to substantiallycomplete transactions between Andersen Worldwide’s non-U.S. member firms and KPMG.’

Ernst & Young chief executive John Judge said: ‘This is exciting news for Ernst & Young and will end a difficult period of uncertainty for Andersen clients and staff.’It will enhance the skills and depth of service we can offer in this market to our clients.’

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