The Big Four company EY will not split its auditing and consulting into two companies after all. The Wall Street Journal reported Tuesday, referring to an internal memo.
Actually, 13,000 partners should vote in April on the separation of the consulting business and then list it on the stock exchange.
Under the name “Project Everest”, EY had been working on the split for more than a year and invested more than 100 million US dollars (91.5 million euros).
The Big Four company EY has canceled a planned split into consulting and auditing business for the time being. That reported das „Wall Street Journal“ (WSJ) on Tuesday. Actually, 13,000 partners of the company should have voted in April on the spin-off of the lucrative consulting business, which should then go public as an independent company.
According to the WSJ, a memo to the partners now states that the US subsidiary has decided to stop “Project Everest”. In principle, however, they are sticking to their desire to separate the consulting and auditing business. How such a split can now be designed in such a way that it finds the consent of the partners remains open.
Serious failure for EY boss
The cancellation of the plan is a major failure for EY global boss Carmine Di Sibio. He was in charge of the spin-off of the consulting business with the aim of an own IPO, according to the “Handelsblatt”. The future of the EY tip is therefore uncertain. According to the WSJ, EY had invested more than a year and $100 million in the planning.
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A group of US auditors who complained about the assignment of the lucrative tax consulting business to the new consulting company was decisive for the failure. Without the tax division, they feared for the competitiveness of the audit division.
The plan was closely followed across the auditing industry, which had aggressively pushed the consulting business as a whole. EY had hoped its path would set a template for other leading audit firms to follow. The plan depended on the approval of partners in dozens of the 145 national companies with a total of 390,000 employees.
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