The latest news of mergers of Andersen overseas units with other Big Five firms features a surprise melding of Andersen-UK with Deloitte & Touche. Formerly it was reported that Andersen was in heavy conversations with KPMG regarding a merger of the UK operation, but in the end Deloitte won when KPMG reportedly backed out of the negotiations due to concerns about Andersen's legal problems. According to an Andersen spokesperson, the Deloitte choice provides a better cultural fit.

Deloitte claims it has structured the merger plan carefully enough so as to prevent any of Andersen's potential legal problems from becoming problems of the new merged enterprise. "It has been arranged in such a way as that's not an issue at all," said John Connolly, Deloitte UK chief executive. Mr. Connolly will remain the chief executive of the new firm.

The new UK company will be known only as Deloitte & Touche. It is expected that the merger will be completed by July 1. In a statement from Deloitte & Touche, the firm said, "Although this transaction is subject to regulatory consent, the partner groups of both firms have already voted overwhelmingly in its favor."

In other merger news, Andersen Brazil has also agreed to merge with Deloitte, as have Andersen firms in Portugal and Mexico.

This past week, Andersen Poland agreed to join forces with Ernst & Young, as have Andersen's operations in Chile and Norway.