Chicago (March 12, 2002) -- PricewaterhouseCoopers has the inside track over Deloitte Touche Tohmatsu in negotiations to acquire troubled Big Five rival Andersen, according to a top-ranking industry consultant.
Allan Koltin, president of Chicago-based Practice Development Institute, said the three accounting firms and federal regulators are discussing scenarios under which either PwC or D&T could acquire Andersen and be shielded from any liability Andersen has from lawsuits or government penalties related to its audit of the collapsed Enron Corp.
Koltin said he was informed of PwC's entry into the Andersen negotiations by high-ranking executives of two national accounting firms.
However, PwC spokesman David Nestor denied that his firm was in talks with Andersen.
Koltin also said there are several reasons why PwC would ultimately win in a bid for Andersen. "This would create the 'Big One,'" Koltin said. He noted that if Andersen were acquired by PwC, which generated some $8.1 billion in 2001 U.S. revenue, the resulting $12 billion company would be the industry's largest, by far, and be roughly twice the size of D&T.
He also noted that PwC's proposed initial public offering of its consulting practice would provide money for the deal, a large number of Andersen clients have already defected to PwC, and Andersen has a strong international presence that PwC covets.
Andersen has denied comment. However, its legal team is trying to hammer out a settlement this week to sidestep an indictment on obstruction charges. The charges stem from its admission that it shredded thousands of documents pertaining to the Enron audit.
-- John M. Covaleski
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