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Mazars reports 15.9% growth in euro and announces megamerger in China

Mazars has reported fee income of €1,252m ($1,363m) in the year to 31 august 2015, up 15.9% on previous year. The network also announced a merger with Chinese audit firm ZhongShen ZhongHuan, offering Mazars a chance to compete for the top 10 in China.

Mazars CEO and chairman of the executive board Philippe Castagnac explained the 15.9% growth to International Accounting Bulletin: "We had 6% of external growth partly linked to the merger with Roever Broenner Susat in January 2015 - I say partly because the merger only counted for the last eight months of our financial year - we had 6% organic growth and a 3.9% Forex effect. "

Castagnac said Mazars was particularly pleased with the level of organic growth in FY15 as it went beyond the expected 5%.

Castagnac also announced that Mazars had merged with ZhongShen ZhongHuan which will bring fee income of RMB 700m ($106m), including RMB400m in audit, 64 partners and 1,500 staff to the network. "It is an old Chinese firm essentially specialised in audit but which also offers tax and cost engineering services."

For now the merger only relates to ZhongShen ZhongHuan's audit practice. The tax practice is not included in the deal, Mazars was unable to confirm whether it might follow suit in the future.

As a result of the merger, Mazars in China will count 1,800 staff and 83 partners in 15 locations.

According to Castagnac, the merger offers Mazars full access to the Chinese market: Be it international businesses or Chinese businesses, as well as listed companies in China. "ZhongShen ZhongHuan focus on the banking sector combined with Mazars own expertise in this sector we will approached with serenity 2018 when the banking sector in China will be required to rotate its auditors."

"This merger corresponds to a need to be more present in Asia for our clients as well as being stronger in terms of geography and skills in one of the main economies in the world," Castagnac said. "This is only a first step as we are already in contact to add teams to Mazars in China throughout 2016."

Zhang Liwen, chief accountant of ZhongShen ZhongHuan, and Shi Wenxian, chief partner of ZhongShen ZhongHuan will join Mazars' group executive board and group governance council respectively.

Top 10 ranking in Mainland China
With this merger Mazars said China is expected to exceed 10% of the network's turnover and the firm could be ranked amongst the largest 10 accounting firms in China. However, according to International Accounting Bulletin's latest China survey, the competition will be fierce. ShineWing CPAs ranked 9th with fee income of RMB1,175.2m (FY13). Baker Tilly China ranked 11th with RMB1,360m in revenue (FY14), and It is most likely to take the 10th position, which has so far been occupied by PKF Daxin CPAs. Part of PKF Daxin CPAs left to BDO in FY14.

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