International accounting firm Ernst & Young has received clearance from the European Union (EU) to proceed with its acquisition of Andersen Germany. The EU had expressed concerned about giving the combined firm a competitive edge among the remaining international accounting firms, but concluded this week that "the merger would not lead to competition problems in this market, given the strong position of the market leaders KPMG and PwC."
The new company will be called Ernst & Young Germany and will have 7,000 employees. The company is expected to have annual revenues approximating $875 million.
At one time it appeared that the Andersen Worldwide operation would be absorbed, en masse, by one of the competitor Big Five firms, but as the Andersen's U.S. obstruction of justice trial proceeded through the Spring months, the firm began disintegrating piece by piece, with all of the rival firms grabbing for various parts of the whole.
At present, E&Y has plans to merge with Andersen firms in 37 countries. Many local branches of Andersen announced plans to sell, merge, or split apart throughout the Spring this year. Some of those initial announcements have already been finalized, others are awaiting regulatory approval in various countries.