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Andersen India mulls merger with KPMG, no deal yet

The Indian arm of besieged accounting firm Andersen said on Wednesday it had not ruled out the possibility of going it alone if a proposed merger with rival firm KPMG falls through.

But it said it was unlikely to continue using the Andersen name if it decided to continue operating on its own.

"We are currently in discussions, exploring combinations with KPMG but nothing has been decided yet," Bobby Parikh, country managing partner at Arthur Andersen in India, told Reuters. "If we go it alone it will be difficult to continue under the Andersen name."

If the two entities merge, their operations will function under the KPMG brand and another name could be introduced later if a market survey recommended it, Parikh said.

KPMG officials were not available for comment, but a statement from the company confirmed that the two firms were in talks.

Although revenue figures are not made public, industry sources say KPMG is the second-biggest accounting firm by billing in India behind PricewaterhouseCoopers, while Andersen ranks fifth.

Andersen's Indian operation has 27 partners and about 900 employees, while KPMG has about 40 partners and directors and also employs 900.

There have been several reports in domestic media that Andersen is also talking to other accounting firms in India, after its US operations faced disintegration under the pressure of criminal charges over its audit of ruined energy trader Enron Corp.

Parikh denied the company had approached other firms and declined to give any deadline for its decision. "We will conclude on any combination at the earliest," he said.

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