Roland Berger Dumps Merger Talks with Deloitte

Lucas Gilmore, “Big 4″ observer
November 22, 2010 /

Following the reported talks between Deloitte and its competitor Roland Berger allegedly paving the way for the merger of the two firms, Berger has just dumped Deloitte’s offer on Sunday after  172 of its partners opted to be independent and voted against the deal.

Deloitte confirmed Wednesday that it had considered merging its consulting arm with the Munich-based consultancy management to boost its presence in Europe. However, Roland Berger said yesterday that the talks had fizzled out when “close to 100 percent” of its partners voted to scrap the proposal on Saturday. The merger would have generated an annual turnover of about 2 billion euros ($2.7 billion), next only to McKinsey which has been known to lead the market.

The management consultancy firm’s founder Roland Berger has been reported to shell out about €50m ($68.5m) of his own money to support the decision of the partners to maintain independence. Roland Berger’s partners are also considering to raise their equity in the company to stand by their decision.

In 2009, Roland Berger has recorded total revenue of €616m while Deloitte generated $7.5bn only up to May 31.

Martin Wittig, Roland Berger’s chief executive, would have served as the chief of the proposed entity to be called Roland Berger Deloitte Strategy Consultants, according to a source close to the deal and who has knowledge of the plan.

Of the “Big Four” accountancy firms, Deloitte has been the only one to remain steadfast in keeping its consulting firm despite the outbreak of the Enron scandal about 10 years ago that had exposed possible incompatibilities of consulting to auditing tasks.

 

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