Mazars and Moore Stephens International member firm RöverBrönner Susat (RBS) have merged and the new firm will join Mazas’ international integrated partnership, retroactive 1 January 2015.
The new firm will take the name RöverBrönner Susat Mazars for a three year transition period before it will rebrand into Mazars Germany. RBS brings 54 partners earning €75m in fees annually. As a result the new firm will count 1,000 staff including 68 partners in 12 offices around Germany.
The new firm is expected to report around € 110m in revenues in the year to 30 June 2015. "In Germany, this strategic merger will position Mazars in the Top 10 in our industry," Mazars announced. However according to IAB latest German survey this is unlikely.
In financial year 2013, RSM International ranked as the 12th largest network in Germany with revenues of €111m, PKF International ranked 11th with fee income of €127m and ECOVIS International with revenues of € 128.9m ranked as the 10th largest network.
With fee income of around €110m it would seem that Mazars would fall short of the top 10 ranking in Germany and would rank in 13th position just behind Moore Stephens International, which would drop from seventh seeded.
In financial year 2013, Moore Stephens International reported revenues of € 192.4m and despite the loss of RBS the network would retain a strong presence in Germany thanks to its 17 other member firms.
RBS was formed only four years ago when Moore Stephens International’s RöverBrönner merged with former Grant Thornton firm SUSAT.
Talking to IAB, Mazars’ Group chief executive and chairman of the executive board Philippe Castagnac said that it was a significant move for Mazars both in Germany and globally.
Mazars has a presence in Germany since 1979, he explained, but it was always considered like a French firms dealing with the large French accounts in Germany. "And through this latest merger with RBS we are really happy to present a more ‘German face’," Castagnac said.
The new firm will now cater for German companies, and as a result Castagnac hopes that it will bring some opportunities on the international scene due to the number of German SMEs going international.
As a result of the merger Germany will now represent 10% of Mazars global revenues, according to Castagnac, making it one of the four most important countries for Mazars in terms of revenues. The other three countries being France, the UK and the US.
"It is absolutely key that we are now seen on the market as an international actor with European origins," he said. "And I totally deny now any French origins because this is a real partnership between Germany, the UK and many other European countries, so Mazars really has European roots and European origins."
Moore Stephens European executive director Chris Rawden told to IAB in a written response: "We are sorry to see RBS leave after a mutually productive and amicable professional relationship spanning many years. We respect RBS’ decision and philosophy and we remain confident in our German positioning and direction."
Moore Stephens International is still represented in most regions of Germany, he continued. "And we are in talks with some interesting firms in areas where we are seeking new growth."
Moore Stephens International sees opportunities for mid-tier networks to differentiate and become more successful, not just through their focus on the audit service line, important though it is, he concluded. "But our philosophy is to be a full international service network offering a strong alternative across the full palette of professional services, including tax and specialist consulting business as well."