P.M. BRIEFING : Arthur Andersen, Price Waterhouse Accounting Firms Consider Merger
Arthur Andersen & Co. and Price Waterhouse announced today they have initiated formal talks about a merger of their worldwide operations, which would create the world’s largest accounting firm.
The two firms issued a news release confirming published reports about the talks and that a confidentiality agreement will be in effect for 60 days while a merger is explored.
A joint statement by Joseph E. Connor, chairman of Price Waterhouse World Firm, and Lawrence E. Weinbach, chief executive of Arthur Andersen, said the the globalization of world economies, accelerating technological changes and demand for new services and investments have created the need for increased worldwide professional and financial resources that would enable the firms to serve their clients.
Rumors have circulated for weeks that Chicago-based Arthur Andersen and New York’s Price Waterhouse, two of the industry’s Big Eight companies, were looking for ways to combine.
Two weeks ago, approval was won for the merger of Ernst & Whinney and Arthur Young & Co. accounting firms. The resulting company is expected to have worldwide revenue of $4.2 billion and domestic revenue of $2 billion.
If Arthur Andersen and Price Waterhouse merge, they are expected to take in $5 billion annually worldwide and $2.7 billion in the United States.
Arthur Andersen is the leading U.S. accounting firm and the world’s second-biggest with international revenue last year of $2.8 billion. It employs 45,000 people.
Price Waterhouse is the fifth-largest in the nation and the fourth worldwide, with international revenue of $2.2 billion. It has a payroll of 39,000 people.