KPMG-Andersen merger talks making 'progress'

Merger talks between KPMG and Andersen in Ireland are said to be making "good progress".

KPMG's managing partner, Mr Jerome Kennedy, told ireland.comthis evening that talks between the two accountancy firms "were well down the track".

Mr Kennedy said an announcement could be expected inside of three weeks if not sooner. He refused to be drawn on the terms that were being discussed, saying that both firms would make a powerful combination in the Irish market.

Meanwhile the breakup of Andersen worldwide continued today, as its Malaysian and Finnish arms agreed to link up with rival Ernst & Young, while its Italian unit said it planned to merge with Deloitte & Touche.

Andersen's Malaysian affiliate and Ernst & Young (E&Y) said they had agreed to combine their Malaysian practices under the Ernst & Young name, giving E&Y another piece of the US accounting firm's Southeast Asian network.

E&Y also extended its European operations by linking with Andersen in Finland, while in Italy Andersen and Deloitte & Touche said they had asked their managers to draw up a merger contract.

The moves came a day after Andersen, indicted for its role as auditor to collapsed US energy trader Enron, said it hired a top restructuring and bankruptcy specialist amid doubts over how it will emerge from the crisis.

The firm is scheduled to go on trial in the United States on May 6th to face a criminal obstruction of justice charge. Since being charged in early March, Andersen has lost hundreds of clients and its overseas business has broken apart, with units linking up with competitors.

In Malaysia, E&Y signed a memorandum of understanding with Andersen affiliate Hanafiah Raslan & Mohamad (HRM) setting out the terms of the merger.

The memorandum envisages that definite agreements are to follow to create a market leader in Malaysia, it said.