Deloitte & Touche has signed a deal to acquire its rival the UK division of Andersen, the accountancy firm implicated in the collapse of Enron. The news comes three weeks after Andersen began merger talks with KPMG. These discussions are rumoured to have broken down over concerns about the extent of Andersen’s Enron liability.
Although the transaction is still subject to regulatory approval, UK partner groups at both firms have approved the move, following agreements in Spain, Portugal, the US and Latin America. An undisclosed number of Andersen UK’s staff are set to join Deloitte & Touche. However, due to lower levels of business, 1500 Andersen staff are to be made redundant. John Ormerod, Andersen UK’s managing partner, blamed difficult economic conditions and the fallout from the Enron scandal for the job losses.
John Connolly of Deloitte & Touche will remain chief executive and senior partner of the enlarged firm, while a number of partners will join the board and executive team. Ormerod said: “We see a strong cultural fit between the firms’ partner groups, and are confident that our partners and staff will prosper under the Deloitte banner.”
As far as the corporate finance business is concerned, partner Chris Ward corporate finance’s head of advisory services based in the firm’s London office, said: “We are very excited by the transaction which will make us one of the most effective corporate finance advisory businesses in the UK.”
The transaction will effectively double the size of the Deloitte & Touche corporate finance business. He added that the Andersen business will bring some first class professionals to the team, as well as an additional sector focus to the business. Andersen has a strong focus on real estate and has considerable experience in the hospitality business, which will enhance Deloitte & Touche’s own experience in the leisure sector, said Ward.