Accountants BDO and Moore Stephens in advanced merger talks
ACCOUNTANCY firm BDO has confirmed that it is in advanced talks to merge with rival Moore Stephens.
The enlarged firm will overtake Grant Thornton to become the UK's fifth largest accountant, behind the so called big four of Deloitte, PWC, EY and KPMG.
The deal is expected to complete in spring 2019 and the new group will trade under the BDO brand.
It will boast gross annual revenue of £590 million and employ 5,000 people across the UK.
Partners of both firms have voted in favour of the merger, subject to final contracts.
Paul Eagland, managing partner at BDO, said: "If ever there were a time for firms to turbo-charge their growth, it's now.
"As a combined firm, we offer greater choice, competition and scalability to the top end of the market, and are better placed to deal with any economic disturbance from Brexit."
BDO, which has Belfast office on Callender Street, specialises in auditing firms on the London Stock Exchange's AIM market and the group plans to take on a second office in the city.
The deal comes at a sensitive time for the sector, with the competition watchdog earlier this year launching an investigation into auditors following a string of scandals and concerns over conflicts of interest.
The Competition and Markets Authority is undertaking a detailed study of the audit sector to examine "concerns that it is not working well for the economy or investors".
But it is the role of the dominant Big Four accountancy giants, rather than smaller players, that will come under most scrutiny amid calls for them to be broken up.
"In the last 12 months - in the wake of Carillion and the subsequent focus on competition in the audit market - the UK market now has a better appreciation of BDO's capability and quality.
"This deal increases our credibility further and proves our commitment to competing in the top-end of the market," Mr Eagland added.
Simon Gallagher, managing partner at Moore Stephens, said: "To be entering final discussions to create the largest UK accountancy firm focused on entrepreneurially-spirited and fast-growing businesses is exciting - and critical for market competition.
"The proposed merger provides a platform for continued, sustainable growth, as well as offering something different to the market at this important time."