Andersen rescue deal collapses

EMBATTLED accountancy group Andersen's proposed rescue merger with KPMG has collapsed following the defection of a number of its overseas operations to other rivals.

The deal, under which KPMG would have taken over Andersen's operations in 84 territories outside of its scandal-plagued American business, has foundered after several Andersen offices unveiled alternative plans.

Andersen, which has been all but destroyed by the fall-out from its role as auditor to disgraced US energy trading group Enron, now faces the prospect of striking country-by-country deals with one of its four major rivals.

The breakdown is an embarrassment for Andersen UK managing partner John Ormerod who, despite doubts that a global tie-up with KPMG would be approved by competition regulators, hailed the deal as the start of a 'process of putting the past behind us'.

The breakdown in talks comes as Andersen's global executive committee and board huddles in London today to discuss appointing a new chief executive following the resignation of Joseph Berardino last week.

The meeting, which could also determine the fate of about 6,000 jobs, follows a dismal few days for Andersen which is facing renewed doubts about the solvency of its US business.