BGN Entrepreneur

Two years ago, Grant Thornton unveiled ambitious plans to increase revenue to £500 million. It had just acquired RSM Robson Rhodes and appeared set for rapid growth. There was talk that it could close the distance on Earnst & Young and break the Big Four’s lock on blue-chip audit and advisory work.
That would have been welcomed by regulators, professional bodies and investor groups, which have become concerned in recent years that the dominance of Ernst & Young, Deloitte, KPMG and PricewaterhouseCoopers could be stifling competition.
However, the prospect of Grant Thornton or BDO eroding the gap now seems fanciful. Both firms were hit by the financial crisis, with their revenues shrinking. Both have made redundancies and cut partners and are focused now on improving profits rather than expanding.
So while the financial Reporting Council is eager to stimulate competition, it seems there is little that can be done. Grant Thornton scotched rumours that it was involved in merger talks with Ernst & Young. Rumors of a tie-up have been rife for several months, but Scott Barnes, chief executive, said they were baseless.
Ernst & Young is under pressure to strengthen its UK operations, yet it would have little to gain from acquiring Grant Thornton other than adding bulk. And regulators would almost certainly block a takeover by a Big Four member of a firm in the next year.

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