Enron-tainted Andersen Closer to Break-up

The break-up of Arthur Andersen, the firm embroiled in the Enron scandal, today moved a step closer as KPMG Consulting announced plans to buy its consulting businesses.

KPMG Consulting said that it had signed a letter of intent to acquire up to 23 independent Andersen consulting units in America, Europe, Asia and Latin America, in a deal worth $284m (£194m).

The Andersen consulting units included in the deal made net revenues of about $1.4bn last year.

But KPMG Consulting, which split off from the KPMG accounting firm in 2000, added that the plan to acquire Andersen's US consulting arm was contingent on resolving potential liability issues stemming from Andersen's role in the Enron collapse.

Worries about potential legal liabilities have undermined attempts by Andersen to merge with other "big five" rivals in recent months.

As a result, many of Andersen's overseas operations have deserted Andersen Worldwide, the umbrella organisation, and struck their own separate deals with other accountancy and consulting firms.

The US partnership is currently locked in a court case in Houston, after being accused by the US Justice Department of obstruction of justice. It suffered a big blow yesterday when Judge Melinda Harmon allowed federal prosecutors to present evidence of the firm's role in previous accounting scandals.

Andersen was taken to court by the American government after a failed attempt to reach an out of court settlement. The accountancy firm is accused of shredding tons of documents in connection with the collapse of the US energy firm, Enron.

Federal prosecutors alleged that Andersen, which audited Enron, began plotting the destruction of documents in early October when it realised the energy firm was crumbling.