The Justice Department gave the go-ahead Thursday to a deal creating the world’s largest accounting firm, closing its antitrust investigation of the proposed merger of Coopers & Lybrand with Price Waterhouse.
The two firms combined would have more than $13 billion in revenues.
“We’re closing the investigation,” Justice spokesman Michael Gordon said. The decision came six months after the two companies announced plans to merge.
The European Union’s antitrust office, which had earlier extended its investigation of the deal, also will not object to the merger, Gordon said. European officials said Gordon’s statement was premature, but the companies said they hope to receive official clearance soon.
The merger would reduce the industry’s Big Six to the Big Five.
It also would create a company that would surpass Andersen Worldwide as the biggest in the industry. The two firms combined have more than $13 billion in annual fees and about 135,000 employees worldwide, including more than 8,500 partners.
Coopers & Lybrand, currently No. 4 among the Big Six, has annual revenue of $7.4 billion and 75,000 employees. Price Waterhouse, ranked sixth, has revenue of $5.8 billion and a work force of 60,000.
The announcement came almost exactly a month after two other huge accounting firms–KPMG Peat Marwick and Ernst & Young–announced they had scrapped their merger plans, citing reviews by antitrust regulators concerned about reduced competition in the industry. That deal would have created an even larger firm than the Coopers & Lybrand and Price Waterhouse venture, with roughly $18 billion in combined revenues.
Coopers & Lybrand and Price Waterhouse–known for tabulating the votes for the Academy Awards–said that when they announced the merger last September that the combined firm would focus strongly on consulting.
