Top Professional Services Firms Agree to Merge in Biggest Ever Empowerment Deal

01 November 2001, Johannesburg - In a deal that will fundamentally transform South Africa's professional services industry, Gobodo Incorporated, the nation's largest black professional services firm is to merge with PricewaterhouseCoopers, the world's largest. The merged firm in South Africa will be known as PricewaterhouseCoopers Gobodo ("PwC Gobodo").

The main motivation for the creation of PwC Gobodo is to position the merged firm as the new model for empowerment in professional services. This new model is in line with government's black economic empowerment objectives. This merger strategically positions black professionals to lead and direct the resources of an international firm.

Gobodo, with 23 partners and more than 350 employees, is the largest black owned South African firm of accountants and business advisors.

PwC in South Africa, with a total staff complement of 3 800, employs 950 black professionals, more than any other firm in the professional services industry, and, at 16, boasts the largest number of black partners amongst the Big 5 firms.

The merged entity will have in excess of 1 250 black professionals with 37 black partners.

Mveleli Booi, Gobodo's chief executive officer, says that from the time of the firm's creation in September 1996, its vision has been to become the country's largest black professional services firm.

"Although we have achieved this to a large extent, our expansion has been constrained by an inability to further expand our capacity and infrastructure. Hence the merger with PwC will accelerate the development of black professionals as industry specialists."

Booi maintains that PwC Gobodo will accelerate the accessibility of black professionals to the private sector. He is confident that the PwC Gobodo formula will act as a model in creating a conducive environment for black professionals to join the profession.

Colin Beggs, chief executive officer of PwC in South Africa, believes that the transaction will enhance the empowerment objectives of both firms and more importantly in the area of black leadership.

"The transaction must be seen against the background of PwC's long-standing commitment to the upliftment of the country generally and of black chartered accountants in particular." He said that it is time for a new business architecture using a large international base to synergise the development of black accountants in South Africa.

"The creation of the largest truly representative professional services firm elevates empowerment in our profession to a new level. There is huge equity in both brands. By effecting the merger, we are clearly demonstrating the leadership position we both enjoy in our industry."

Highlighting the power of the merged entity, Beggs, noting that it is a marriage of capacity and transformation, draws attention to the following:

• The majority of the firm's executive will be black.

• PwC Gobodo will offer stronger capabilities and service offerings in both the public and private sectors.

• Specialist resources will enable PwC Gobodo to service all industry sectors, without exception.

• New black entrants will relate well to the large number of role models and we would strive to make the environment truly representative; and

• The merger will help ensure that the two firms achieve their vision and objectives now, rather than over the next decade.

• The PwC Gobodo spread of offices throughout Southern Africa will assist in the promotion of the SMME sector.

Booi will become the executive chairman of PwC Gobodo Southern Africa with Beggs as CEO. The deputy chief executive officers are Suresh Kana and Stanley Subramoney and the chief operating officer is Stèfan Fourie. Other members of the executive committee are Haroon Lorgat and Malcolm Dunn. Gobodo partners Sathie Gounden and Hassen Kajie will head up PwC Gobodo's KwaZulu Natal and Western Cape regions.

The merger has been widely endorsed by South Africa's political and business leaders.

Contacts:
Mveleli Booi, CEO Gobodo Incorporated:
Tel: +27 11 482 2510
e-mail: mbooi@icon.co.za

Colin Beggs, CEO PricewaterhouseCoopers:
Tel: +27 11 797 5473
e-mail: colin.beggs@za.pwcglobal.com

© 2001 PricewaterhouseCoopers