The European Commission has given its approval to the acquisition by Big Four firm Deloitte & Touche of Andersen UK. Deloitte requested approval for the acquisition on May 29. The European Commission carefully considered the proposal, wanting to ensure a monopoly would not be created that would be harmful to large multinational companies such as those traded on the London Stock Exchange.
The European Commission concluded that the serious problems facing Andersen as a result of the firm's guilty verdict in its U.S. obstruction of justice trial would prevent the company from effectively servicing its large clients. "Large clients demand a global network, a high degree of international expertise and a reputation that only the remaining Big Four firms can offer. Andersen Worldwide was able to offer this, but Andersen UK on its own cannot," read the Commission statement.
The Commission concluded that there was no danger of the creation of a single dominant accounting firm in the UK because Andersen and Deloitte held the two smallest positions of the Big Five in the UK. PricewaterhouseCoopers is the largest firm based on audit fees, followed by KPMG and Ernst & Young.
The European Commission stated that Andersen clients were largely supportive of the change, noting that many clients found the merger of the two firms preferable to a disorganized dissolution of Andersen with clients having to seek out new services on their own.
Deloitte & Touche Senior Partner and CEO John Connolly said the firm hopes to incorporate the assets and most of the partners and employees of Andersen within the next few weeks. "We are absolutely delighted with this decision," he said. "We now have a real opportunity to develop a distinctive professional services firm. Client focus and quality will remain an obsession: delivering outstanding service to all our clients will continue to be our top priority."
Andersen UK Managing Partner John Ormerod said, "This decision is great news. We will work quickly towards integrating Andersen people into Deloitte and we will do this with great enthusiasm and speed."