Grant Thornton and BDO Canada Resist the Urge To Merge
Accountants call off merger talks
BDO Dunwoody LLP and Grant Thornton LLP have ended their merger discussions.
“No specific reason led to the decision to cease discussions; however, both firms recognized that despite the potential of the union, a merger of this nature also presented significant challenges,” the companies said in a joint news release Friday.
Let the games begin…
“TORONTO, April 13 /CNW/ – Grant Thornton LLP and BDO Dunwoody LLP
announce today that their respective Boards have agreed to enter into merger discussions. BDO Dunwoody LLP and Grant Thornton LLP are both national accounting and advisory firms with offices across Canada.
Preliminary discussions between Grant Thornton LLP (“Grant Thornton”) and BDO Dunwoody LLP (“BDO Dunwoody”) have indicated potential opportunity for
both organizations including their respective clients, employees and partners.
Over the next several months, representatives from both organizations will engage in a due diligence process to further assess the merits of a combined organization. Raymond Chabot Grant Thornton (“RCGT”), the Quebec-based firm of Grant Thornton in Canada, is also participating in these discussions in connection with its joint presence with BDO Dunwoody in Montreal and the Ottawa area.
Both firms are highly successful today operating as independent entities.
Together with Raymond Chabot Grant Thornton, Grant Thornton in Canada has 370 partners and 2900 employees working in 99 offices across Canada, and is the Canadian member of Grant Thornton International. BDO Dunwoody has over 315
partners and 1900 employees in 95 offices across Canada, and is the Canadian member firm of the BDO International network.
According to Alex MacBeath, CEO of Grant Thornton, “A merger would
represent a marriage of opportunity. A combined firm would reflect a merger of two strong firms.”
Gilles Chaput, CEO of BDO Dunwoody, comments that, “A combined firm would have enhanced strength, capacity, depth, and market credibility to compete in
marketplaces across Canada, while at the same time maintaining a strong
position in the local communities throughout Canada.”
By agreeing to this announcement, the parties have signaled their belief that there is sufficient opportunity to warrant further discussions.”
This could be the start of a global mergers of smaller accountancy networks.
Interesting in an article in The Bottom Line, Steve Salterio, Queen’s University professor, infers that Grant Thornton could be the merged continuing firm in Canada.
Excerpt from the article:
So what will the new, and significantly larger, company call itself? It’s likely to stick with an existing name, one recognized around the country if not the globe.
Salterio is putting his money on Grant Thornton as the moniker of choice.
“In the U.S., Grant Thornton has grown by leaps and bounds. One would surmise that one would go with the horse that is winning.”
All of the sound reasons for merging were just as sound a few years ago. So why did serious discussions start only a weeks ago, and why was the ground only fertile in Canada?
“I have wracked my brains. They’re not talking,” said Salterio.
“It’s an enigma,” he noted. There is more to this story than we’re being told.”“
Maybe we should see who has worse PCAOB grades. In the old days in the banking industry, the regulators would force a shotgun marriage so a weaker bank wouldn’t fail. Just a thought from a professional skeptic.