Andersen's Global Network Merger Plans Unravel

Hopes for a global merger of Andersen's powerful worldwide network with one of the other Big Five firms are already a distant memory.

As late as last week, observers were waiting for an announcement of a sweeping worldwide merger between Big Five giant KPMG and the non-U.S. operation of beleaguered Andersen. The announcement never came.

But now, rather than operating as a united block, independent factions of Andersen's operations around the globe are splitting away from the once powerful network and are choosing to pursue their own merger plans.

While some firms, including Andersen Asian operations in South Korea, Taiwan, Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, as well as Andersen Canada and Andersen operations in various central and eastern European nations, are still participating in merger discussions with KPMG, many other Andersen companies have decided to merge with other entities.

Last week it was reported that Andersen Hong Kong and Andersen China have reached an agreement to merge with PricewaterhouseCoopers, and Andersen Russia announced plans to join forces with Ernst & Young.

Today, a merger agreement was reached between Andersen Australia, one of the largest Andersen operations outside the U.S., and Ernst & Young, which solidified an arrangement with Andersen New Zealand last week. Additionally, Andersen India, although not totally discounting the discussions with KPMG, is seriously considering becoming an independent firm.

Giving the KPMG discussions a boost in Asia was the announcement today of an agreement reached between Andersen's Japan operation, Asahi, to merge with KPMG.

Andersen's Spanish operation, considered by some to be the key to holding a KPMG/Andersen European merger in place, is reported to be wavering in its support of the proposed merger. "The proposal from KMPG at an international level is interesting, but while it appears positive it is not the only option," said a spokeswoman for Andersen in Madrid. "The Spanish partners are still analyzing the different alternatives."