Deloitte Touche Tohmatsu Ends Discussions to Separate Deloitte Consulting
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Manufacturing News, Source : TheManufacturer.com
Published : 29 Mar 2003 12:15
Deloitte Touche Tohmatsu blamed an uncertain economy and and a fall off in consulting work in announcing its decision to end discussions to separate Deloitte Consulting through a buy-out of that practice by the consulting group's partners.
The firm said that Deloitte Consulting partners would continue to provide a broad set of professional services, principally focused on nonaudit clients.
In the wake of the Enron/Anderson scandal, Deloitte had, like its leading competitors, sought to separate its auditing and consultancy arms, with Deloitte Consulting becoming a privately held partnership. Agreement had been reached internally with the Deloitte Touche Tohmatsu member firms on organizational and financial terms of the separation. Deloitte said it enjoyed a strong capital structure, a position that was necessary to be able to continually invest in initiatives to enhance the quality of audits. In an uncertain economic environment, financial terms of the proposed transaction that might have weakened this position were unacceptable to both groups of partners, it added.
"We gave this our very best efforts, but concluded, with advice from our outside legal and financial advisors, that it is just not prudent to complete this transaction in this environment," said James E. Copeland, Jr., CEO of Deloitte Touche Tohmatsu. "We began this process at a time of more robust consulting, capital and credit markets - all of which have deteriorated in the past 14 months, due to economic uncertainty exacerbated by the war in Iraq."
Deloitte Touche Tohmatsu had announced on February 6, 2002 that it intended to separate Deloitte Consulting. In the United States, the firm then, as now, is not required to separate the consulting organization.
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