Andersen Seeks Buyer, Talking With Deloitte

Andersen, which has been shaken to its core by investigations stretching from Wall Street to Washington, has held merger talks with No. 2 accounting firm Deloitte Touche Tohmatsu, the Andersen source said.

Andersen expected some progress on the talks--which could involve a wholesale acquisition or unit sales, according to published reports--by the end of this week, the source added.

Any merger deal would have far-reaching consequences for the accounting profession, which would become further concentrated if Andersen combined with another firm. The current group of top firms, known as the Big Five, dominate the corporate auditing business and the remaining four would gain significant heft if Andersen collapses.

At the same time, sources close to Andersen and Deloitte emphasized no deal is imminent. A Deloitte acquisition faces many hurdles, in particular how to deal with Andersen's legal problems. Andersen faces Enron investor lawsuits and possible fraud or other criminal charges.

Chicago-based Andersen, which employs nearly 85,000 people worldwide, signed off on bankrupt Enron's books. The firm has admitted its Houston office shredded documents sought by investigators--and now faces possible criminal charges of obstruction of justice. Both the Wall Street Journal and the New York Times on Monday reported the talks.

Andersen and Deloitte spokespeople declined to comment on the reported talks, but issued statements that didn't rule out any options.

"Deloitte Touche Tohmatsu has been conducting ongoing scenario planning in response to the current and projected state of the profession, and it's not our practice to discuss the details of any such planning in public,'" a New York-based Deloitte spokesman said.

An Andersen spokeswoman said, "Andersen is considering many options to enable us to continue to successfully serve our clients and promote the career opportunities of our people.'"

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