Brussels to take in-depth look at Coopers-P&Y merger
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Your support makes all the difference.The European Commission is to carry out an in-depth investigation of the proposed $13bn merger between Coopers & Lybrand and Price Waterhouse, the accountancy and management consultancy firms. Roger Trapp reports.
The Commission is worried that the move could give the enlarged firm high market shares in such areas as audit and tax work in certain EU states.
The Commission's decision had been widely expected ever since the planned deal was announced last September and means that the firms will probably not know whether they have won approval until the end of May.
The announcement made clear that, "given the world-wide extent of the operation", there would be consultations with the US authorities also examining the proposed merger.
Peter Smith, chairman of Coopers & Lybrand UK and due to be a member of the team heading the merged firm, said last night: "We have always recognised the possibility that the Commission would want to move to a second-stage inquiry, given the complexity of the services we provide and the number of countries where we operate."
Speaking on behalf of both firms, he added that the phrase "raises serious doubts as to its compatibility with the common market" was the standard phrase used when the Commission referred a merger to a stage-two inquiry. "We are confident that we shall be able to satisfy any concerns which the Commission identifies during this phase," Mr Smith said.
There was no formal announcement yesterday on the planned $18bn merger between two other Big Six firms, KPMG and Ernst & Young, because they submitted their proposal some time later and it is understood that the Commission is still gathering views on the deal.
However, Karel van Miert, Competition Commissioner, is reported to have said earlier this week that he assumed he would open an in-depth inquiry into it so that the two proposals could be assessed in parallel. Both merger camps have recently sought to stress the European benefits of their deals.
Coopers and PW have claimed that thousands of jobs would be created in the region if the deal is allowed to go ahead, while KPMG and E&Y have sought to stress that their combination would include a strong European element in the leadership and would therefore act as a bulwark against perceived US domination of the accounting and consulting sector.
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