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Denmark: Merger in the audit industry approved with commitments

28. maj 2014

The Danish Competition Council (DCC) has approved EY’s takeover of KPMG in Denmark, subject to commitments.

The purpose of the commitments is to support the reestablishment of KPMG International’s presence in Denmark so that KPMG International’s new company in Denmark, KPMG 2014, will be able to exercise significant competitive pressure in the market.

The commitments entail that up to 200 former or current employees of KPMG DK and EY will be are released from some of their non-solicitation obligations and have their notice periods limited. The expected result is that the relevant individuals will be able to begin working for KPMG 2014 sooner and that they will be able to serve clients of particular relevance for KPMG 2014.

The DCC found that the merger would give rise to concerns as it could have restricted competition on the markets for audit and tax services to the biggest companies in Denmark. However, the DCC assessed that the commitments would eliminate these concerns.

Prior to the merger, KPMG in Denmark and EY were among the biggest audit firms in Denmark and both were part of the so-called Big4 audit firms. In Denmark, Big4 represent approximately 40 percent of audit industry turnover. After the proposed merger was made public, KPMG International set up a new company in Denmark, KPMG 2014.

The DCC found that it was of critical importance for the approval that KPMG 2014 within a reasonable period of time could be expected to be well-established in Denmark. In its assessment, the DCC took into ac-count the upcoming EU regulation of the audit industry.

For further information contact Head of Division, Martin Nyvang, at +45 4171 5190 or Deputy Head of Division, Adrian Luebbert, at +45 41 71 50 30.