KPMG, Ernst & Young Merging
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
"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
The merged firm would also outdistance the combination of
Price Waterhouse and Coopers & Lybrand LLP, whose merger was
announced last month. …