TWO major UK accountancy firms are in advanced talks over a merger deal that would create a business with around 3,500 staff and more than 30 offices.

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BDO and PKF have confirmed plans for a tie-up bringing together the UK’s sixth-largest and 12th-largest accountancy firms with combined revenues of nearly £400million.

The firms said it was too early to say what the impact would be on staff and offices, but stressed they had a “commitment to growth”.

The deal is expected to take place early next year and will be the first merger of its kind in the market for 15 years, according to the groups, creating a stronger competitor to the “big four” accountancy giants which dominate the market.

Simon Michaels, managing partner of BDO, said: “The merged firm will have a strong balance sheet, as well as unrivalled sector and geographic strength in many areas.”

He added that the deal shows both firms are “ambitious for growth”.

The merger would see PKF, which has more than 1,200 employees and 20 offices in the UK, become part of BDO International after the merger and rebranded as BDO.

PKF, which has around 20 offices around the UK at locations including Ipswich, Norwich and Great Yarmouth, has seen revenues come under pressure over the past year, with total income down by £5m to £103.3m in the 12 months to March 31.

BDO, which has 13 UK offices, at locations in Chelmsford and Cambridge, had UK fee income of £281.5m in the year to last September 30, ranking it the sixth in the UK behind Pricewaterhouse-Coopers, Deloitte, KPMG, Ernst & Young and Grant Thornton.

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