KPMG UK Head Office moving to Frankfurt !
KPMG’s member firms in the U.K. and Germany have announced a proposal to merge to form a single entity, KPMG Europe LLP. It will be a member firm of KPMG International, the global network of professional service firms providing Audit, Tax and Advisory services.
With a projected turnover for the U.K. and German firms in excess of 2 billion pounds in the current year, KPMG Europe LLP will be – from the outset – the largest fully integrated accountancy firm in Europe. The firm will be a new U.K. registered LLP comprising more than 17,000 partners and staff working from 44 offices across the U.K. and Germany, with its head office in Frankfurt.
The merger will be the first stage in a plan to create a fully integrated KPMG member firm in Europe. The ambition is that other KPMG member firms in Europe will merge into the new entity, should they wish to join.
KPMG Europe LLP will be chaired jointly by John Griffith-Jones, currently Chairman of KPMG LLP (U.K.), and Prof. Rolf Nonnenmacher, currently Chairman of the Managing Board, KPMG Deutsche Treuhand-Gesellschaft AG.
In a combined statement, they said:
“This is an innovative and ground-breaking move which is both necessary and important. This merger will create Europe’s strongest and largest accountancy firm. KPMG has a distinct European heritage, and this will give us a true European voice on the global stage.
“We believe the merger will be good for all our clients, because we will be able to serve them even more effectively; good for our people, because it will increase opportunities open to them; good for the public interest and the capital markets, because of the combined strength and quality of our audit practice; and beneficial for our business, because it will enable us to take advantage of the enormous changes we are witnessing in economies and businesses globally.”
The proposal has been approved unanimously by the boards of KPMG LLP (U.K.) and KPMG Deutsche Treuhand-Gesellschaft AG, and those decisions are now subject to approval by partners in the U.K. and Germany during December 2006. Today’s announcement is the first such merger among firms representing global accounting networks – made possible by the European Commission’s Eighth Directive legislation, which allows cross-country ownerships in accountancy firms. KPMG Europe LLP will commence operations next year, as the Eighth Directive becomes effective.
Across a number of areas of the business, it is expected that a broader base of clients and increased investment capability will greatly benefit growth.
* The merger reflects the increasing international importance of the European capital markets – and the need to support the growing number of companies that choose to list on European exchanges. The new firm will represent a strong voice for European business on regulation and other key issues that affect the audit and accountancy profession – and its vital role in support of the global capital markets.
* The new firm will be structured to meet the changing demands of clients who require a seamless audit, tax and advisory service on a pan-European basis. With a single leadership team and a powerful professional capability in one broader resource pool, the new firm will be able to invest more, and get more from that investment by working as one – developing new solutions and techniques more quickly and efficiently.
* The new firm will aim to recruit and retain the best talent, creating a training ground for the European business leaders of the future. It will offer integrated European graduate and other training schemes, and aim to create a culture in which our people will be offered new international opportunities, a compelling future, and a wide variety of cross-border challenges and experiences.
Prof. Nonnenmacher said:
“There can scarcely be a single European organisation, of any size, which is untouched by cross-border considerations. By pooling the talent, expertise and service capabilities that exist among our people in individual countries, we will bring tangible benefits to all our clients, whether they are the largest multi-national, listed, privately-owned, government-backed, private equity-backed, or the younger ambitious start-up organisation. As is the case today, our delivery will remain local, but our capability will be truly international.”
The European Commission’s Eighth Directive legislation clarifies the duty of statutory auditors and sets out certain principles to ensure their objectivity so that investors and other interested parties can rely on the accuracy of audited accounts.
Mr Griffith-Jones said:
“We are responding quickly to the Directive’s fundamental aims of better regulation of the audit and accountancy profession. KPMG Europe LLP will have a strong European business voice to champion improved audit quality, liability reform and the highest standards of professionalism in the public interest.
“The firm will also press for regulatory convergence, a principles-based approach to independence and accounting, and the highest quality in financial reporting – within a framework that promotes competitiveness and investor confidence.”
KPMG International, the coordinating entity for KPMG member firms globally, is highly supportive of the merger proposal.
Mike Rake, Chairman of KPMG International, said:
“This merger makes sense for clients, regulators, the capital markets and KPMG’s people. Increasingly, global accountancy networks need to ensure that their structures are aligned to the expectations of a wide variety of stakeholders, including regulatory authorities, investors and governments which demand transparency, strong governance, quality and consistency.
“The proposal to create KPMG Europe LLP is a pioneering move. KPMG member firms have been working increasingly closely together, and this main merger will mean even better allocation of resources and more rewarding opportunities for our people in the years ahead.”