PwC 10-year anniversary special report

On the 1 July 2008, PricewaterhouseCoopers celebrates 10 years since it came
into being, following the merger of Price Waterhouse and Coopers & Lybrand.
At the time, this mega-merger was highly controversial, upsetting both clients,
FDs and the rest of the profession. It sparked other merger attempts among the
then Big Six and huge resistance from many international affiliates of the two
firms involved.

A decade on and the firm is on a sound footing, standing above its rivals in
the Accountancy Age Top
50 with fee income beyond £2bn a year, but it wasn’t always plain sailing
and the merger had a huge impact on the rest of the profession.

This special report explores the long-term implications of the profession’s
biggest merger and relives how the union came about ten years ago

The implications:

PwC:
ten years on

Boyle brands PwC merger
‘unfortunate’

PWC: is it too big for its
boots?

Competition concerns were all
too predictable

Will
PwC’s next ten years be as profitable?

The history:

September 1997

Coopers & Lybrand and Price Waterhouse
announce
plans to merge, creating the UK’s largest firm and reducing the Big Six to a
Big Five, but their
clients
are not happy.

October 1997

In a direct response to the threat posed by thier rivals, Ernst & Young
and Deloitte also announce a merger strategy, potentially reducing the number of
largest firms to just four.
Corporate
FDs are displeased by the move.

November 1997

Coopers & Lybrand deny that the merger will mean the
loss
of 850 partners.

December 1997

Partners at both firms
approve
the merger plan but it needs to
clear
EC hurdles first

February 1998

Following a
probe
of the audit market by the EC, E&Y and Deloitte abandon their plans to
merge, prompting
‘jubilant’
reactions from Coopers and PW. Ian Brindle, then senior partner at PW said
the collapse lifted
‘the
shadow of an ugly spectre’ from their own merger plans but admitted that
jobs
would go.

March 1998

The two firms are hit by
objections
from the EC to the merger, but still expect the union to be approved.

April 1998

Concerns from several European competition authorities on the
concentration
of audits in the banking and insurance sector threaten to throw a spanner in
the merger works

May 1998

The firms decide on the
new
name for the merged business – PricewaterhouseCoopers

June 1998

Final preparations are underway. A
new
board is announced that shares power equally between the two firms, partners
are anticipating a
windfall
bonus from the merger and one last hurdle is removed with the
resignation
of Coopers’ Spanish chairman whose opposition had threatened to derail the
deal. But some believe that partners will always see themselves as
belonging
to Coopers or PW.

July 1998

PricewaterhouseCoopers officially comes into existence, but many partners are
left
in the dark over their new positions and several of Coopers’ international
affiliates defect to other firms, including
Brazil,
Chile, Zambia and
Zimbabwe.

September 1998

PwC is confirmed as
holding
more listed audit clients than any other firm

November 1998

Following the merger, PwC admits that it has
lost
three major clients to rivals, including Abbey National and Diageo, with
others reviewing their audit arrangements.

February 2000

PwC announces plans to
split
the firm up, with the audit, tax and business advisory business being
separated from management consultancy and other services.

August 2002

Following a short-lived relaunch as Monday,
PwC
Consulting is sold to IBM for $3.9bn

September 2007

PricewaterhouseCoopers becomes the first UK firm to achieve
turnover
of more than £2bn in a year, growing more than 50% since the combined firm
first posted £1.3bn fees in our 1998 Top 50 survey