PricewaterhouseCoopers and Gobodo Inc are to merge to create South Africa's largest firm of auditors and business advisers, with the largest black economic empowerment component.

The merger will take effect on January 1, 2002, and the new firm will be known as PricewaterhouseCoopers Gobodo (PwC Gobodo).

Addressing a press conference in Johanneburg on Thursday, PwC CEO Colin Beggs, who is to be the CEO of the proposed firm, said:

"I believe we will exceed government's present empowerment expectations."

Beggs said they had canvassed political figures, including Deputy President Jacob Zuma, before going ahead with the merger.

Mveleli Booi, who is to be the firm's executive chairman, said Gobodo was at present "bigger than any other emerging firm in the country."

Booi said the new firm would provide role models for black trainee accountants who served their articles there, but would be a home for all -- not just for black or just for white students.

Four out of seven members of the new firm's executive will be black.

PwC is already the firm with the largest number of black professionals --about 950 -- and recruits 40 percent of new staff from black graduates.

Suresh Kana, to be one of two deputy CEOs, said the merged firm would have some 300 partners in South Africa, out of a total of about 330 in eight Southern African countries.

Kana said 22 of the partners in the firm would be women, and over 50 percent of the total staff would be women.

The new firm will have about 1200 black professionals, and 37 black partners.

Booi said in the past PwC had concentrated on private sector work, and Gobodo on the public sector, and obvious advantages would result from the merger.

Part of the reason for the merger was to produce people who could fill the country's staff shortages in the financial sector.

The new firm would continue Gobodo's efforts to raise awareness among black school pupils of accounting as a profession.

Asked for further reasons for the mergers, Booi said that part of the reason was to increases Gobodo's trainees to global experience.

"At the moment we can't say we are going to send you to the US or Japan," he said.

He wanted PwC Gobodo trainees to become specialists in their areas of auditing, such as banking, oil and transport companies.

The directors emphasised that the new firm would not lose sight of its work in small, medium and micro enterprises.

They said both the PwC brand and the Gobodo brand had value, and both would be preserved in the merged entity.

Asked what regulatory requirements were still to be met, Beggs said the Competition Commission was expected to approve the deal, and the global board of PwC -- on which Beggs sits -- had discussed the matter, and he expected no difficulties there.

No money would change hands in bringing about the merger, as a professional partnership was not like a company with a shareholding.

Asked if jobs would be lost through the merger, Booi said any "overlapping" staff would be offered redeployment. Beggs said that when his firm merged with Coopers Lybrand there were no job losses.

With acknowledgements to Sapa.