Newspaper article The Florida Times Union

KPMG, Ernst & Young Merging

Newspaper article The Florida Times Union

KPMG, Ernst & Young Merging

Article excerpt

Ernst & Young and KPMG Peat Marwick are merging to form the

world's largest accounting and consulting firm, targeting new

business from emerging markets and multi-national corporations.

The companies expect the merger to be completed by the start

of next year. The merged company, which has not yet been named,

will operate in 135 countries.

Both firms have offices in Jacksonville on separate floors

of the Independent Life building downtown, but no decisions have

been made on how the merger will affect them.

KPMG has more than 75 employees in Jacksonville. Ernst &

Young officials in Jacksonville could not be reached yesterday.

The two firms are combining as mergers sweep the

financial-services industry. Banks, brokers, insurers and

accountants are trying to boost profits and slash expenses by

combining.

"The real emphasis now is to service the needs of global

companies wherever they want to go in the world," said Stephen

Butler, chairman and CEO of the U.S. operations of KPMG, who

will be the CEO of the new firm's U.S. operations. "Our clients

require an organization that has greater financial strength and

can deliver a wider array of services and products."

Together, Butler said, the new firm will have the money

needed to invest in technology and in building accounting and

consulting practices in China, the former Soviet Union, Latin

America and Asia.

While the firms separately have seen revenue grow by 20

percent a year, Butler expects the combined company can grow by

30 percent annually.

The new firm will be run by Colin Sharman, who is now

worldwide chairman of KPMG. Michael Henning, currently Ernst &

Young's worldwide chief executive, will be the CEO of the merged

firms. Philip Laskawy, U.S. CEO of Ernst & Young, will be

chairman of the combined U.S. operations. The worldwide

headquarters will be in Amsterdam.

The companies have been in talks since Sept. 25, Sharman said

at a news conference in London. "The timing is, of course,

influenced by the recent announcement of the merger of Price

Waterhouse and Coopers & Lybrand."

The merger will move the new company ahead of industry

leader Andersen Worldwide in terms of both revenue and partners.

KPMG and Ernst & Young had combined revenue of $18.8 billion in

fiscal year 1997 and will have 163,250 employees and 12,800

partners worldwide. Andersen's 1997 revenue is estimated at

$11.3 billion.

The merged firm would also outdistance the combination of

Price Waterhouse and Coopers & Lybrand LLP, whose merger was

announced last month. …

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