Brussels, 02/07/2002 (Agence Europe) - The British company Deloitte & Touche (D&T), which is part of the worldwide chartered accountancy and audit group Deloitte & Touche Tohmatsu, received Europe's go-ahead for merging its activities with those of Andersen in the United Kingdom. The European Commission assessed the impact the operation would have on competition and concluded that, given the circumstances that had led to the dismantling of Andersen, one of the five leading audit and accounting firms ("Big Five"), there was no reason to oppose the operation. We recall that, following the bankruptcy of the American energy giant Enron Corp., Anderson encountered serious problems linked to the decision made by the US courts whereby the advisory firm was reported to have hampered the inquiry by destroying important documents regarding Enron's situation. These events were damaging to Andersen's reputation and led to implosion of the group, and the various national branches of Andersen sought independently to join one of the four other main operators in the sector (namely: Price WaterhouseCoopers, KPMG, Ernst & Young and D&T).
The operation notified covers the acquisition by D&T of certain Andersen assets in the United Kingdom, including equipment, furniture, leasehold properties and the rights under service contracts. D&T also proposed partnership or employment to most of the partners and employees of Andersen UK. The Commission studied the impact this operation would have on the audit and chartered accountant market of the main companies quoted that generally entrust such missions to the "Big Five". The Commission felt there was no risk of a single dominant position given that Andersen and D&T are the smallest of the "Big Five" in the United Kingdom. The Commission also assessed the consequences that the disappearance of one of the five leading audit companies would have. It felt that, although Andersen UK might be able to continue as an independent audit and accounting services firm for smaller clients, it could no longer service its large clients. Large clients demand a global network, a high degree of international expertise and a sound reputation. The reduction to four big firms ("Big Four") was, it considers, therefore inevitable and would happen at any rate whether Andersen UK was taken over or simply disintegrated. Furthermore, the acquisition of the British branch of Andersen by smaller audit and accounting companies would not have given the new company the necessary reputation for access to the market for quoted and large companies.