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Accountancy merger creates world leader

positive effect on their Bermuda-based partnerships, senior partners said yesterday.The merger between professional services and consulting firms Coopers & Lybrand and Price Waterhouse would create the world's largest accountancy group,

positive effect on their Bermuda-based partnerships, senior partners said yesterday.

The merger between professional services and consulting firms Coopers & Lybrand and Price Waterhouse would create the world's largest accountancy group, knocking Andersen Worldwide off the top and changing the big six to the big five.

The news of the merger was announced yesterday, but has been the subject of much discussion among partners, including those in Bermuda, since Tuesday. The deal won't be done until a general vote of the partners and approval from regulators, but may come into effect in the new year.

Ian Davidson of Gray & Kempe/Price Waterhouse Bermuda said, "We all view this development, globally and locally very positively. Bermuda being a leading international financial centre, the synergies and advantages we see globally, we also see for our firms locally.'' Kirk Cooper of Cooper & Lines/Coopers & Lybrand Bermuda said, "This is a financial services centre, and both of these firms have significant strengths in that area. It can't help but be a plus for everybody, including staff, the industry in Bermuda, the private sector and the two professional firms.'' The partners of the two firms discounted any possibility of staff redundancies as a result of the merger. Cooper & Lines employs about 100 people and Gray & Kempe has staff of about 55.

Mr. Cooper said, "This merger is about growth, not about reducing costs through lay-offs and redundancies.'' Mr. Davidson added, "That's certainly right. Because looking at it from our point of view, we're constantly struggling with how can we can attract the best and the brightest and retain their services.

"There are so many opportunities in Bermuda for professional accountants that one of the biggest challenges all the accounting firms face is retaining staff. As Kirk said, we see this as growth, not contraction.'' Mr. Cooper said, "We anticipate globally, and likely here in Bermuda as well, because of our global strength and our seamless service approach, to be able to retain and attract more people, with the ultimate objective of developing the best people in the world to serve our client.'' Some observers see one of the driving forces for such a merger as the firms' strength in blue chip audit clients. Coopers has some 30 of the top 100 companies on London's stock market.

The merger comes amid consolidation in the financial services industry worldwide and is the first to affect the accounting and consulting industry since two mergers at the end of the 1980s.

Coopers chairman Nicholas Moore, who will be chairman of the merged firm, said in a prepared statement, "Unlike previous mergers in our business, our decision to combine has been driven by the recognition that our clients require seamless global support and levels of expertise that, until now, were simply not available from any one organisation.'' James Schiro, chief executive of Price Waterhouse, will be chief executive of the combined operations, which is yet to be named. Analysts believe the merger is a boost to the consultancy business. Combined 1997 fees of the two companies exceeded $13 billion, followed in order by Andersen Worldwide and Ernst & Young. All of the firms are privately held by their partners who don't disclose profits.

Coopers is stronger in Europe, while Price has the edge in Latin America and Southeast Asia. Coopers' has strength in telecommunications and mining, while Price excels in media and entertainment and utilities. Both are strong in oil and gas and in banking.

The combined firm will have about 135,000 staff worldwide and 8,500 partners.

It is not known if the consulting divisions will be merged.