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Andersen Asia-Pacific affiliates support global merger with KPMG

SINGAPORE (AP) _ The Asia-Pacific affiliates of troubled accounting giant Arthur Andersen unanimously supported a global merger with rival KPMG, the companies' executives said Tuesday.

The merger talks will continue even if similar ones in Europe concerning operations elsewhere around the world fail, said Aldo Cardoso, chairman of Andersen Worldwide's board of partners, and Colin Holland, chief operating officer of KPMG International.

The merger talks in Frankfurt, Germany, concern operations in Europe, Africa, the Middle East, Canada and Latin America.

Andersen Worldwide is the umbrella body that includes Arthur Andersen.

Cardoso said the 13 Andersen affiliates in the Asia-Pacific region unanimously supported the merger to distance themselves from Andersen's U.S. division, which faces federal criminal charges relating to the collapse of Enron Corp.

A combined Andersen and KPMG would have revenues of over $2 billion in the Asia-Pacific region and a work force of about 28,000, Holland said.

Excluding the United States, the two firms would have global revenues of $16.9 billion, making the merged entity the world's second-largest accounting firm.

Senior executives of 13 regional Andersen affiliates met in Singapore to decide whether to negotiate as a block or individually.

Andersen also discussed alternative options with Ernst & Young and Deloitte Touche Tohmatsu, whose representatives also attended the meeting here, Cardoso said.

Geneva-based Andersen Worldwide is the umbrella body of Andersen, a global network of professional service companies in 85 countries, including Arthur Andersen in the United States.

The U.S. arm, based in Chicago, has been charged by federal authorities with obstructing justice by destroying thousands of documents and deleting computer files about its audit of energy trading firm Enron. Andersen denies the charges.

Andersen is set up in a way that leaves its divisions outside the United States uninvolved in the Enron case, but Enron's spectacular collapse has badly tarnished the Andersen name.

Some high-profile Andersen clients, including Delta Air Lines and the drug maker Merck & Co., have fled in the wake of the Enron debacle. Other companies appear to be close behind.

The biggest accounting firm in the Philippines, SGV & Co., is allied with Andersen but said in a letter to clients it wants to find another international partner.

``Some of these firms have approached us and we will make our choice at the appropriate time,'' said Cesar V. Purisima, chairman and managing partner of SGV.

There also have been reports in Japan that the major audit firm Asahi & Co. is negotiating to end its partnership with Arthur Andersen LLP.

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