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April 30, 2008

Mazars firms in Europe benefit from German merger

Mazars firms in Europe benefit from German merger

The integration of German firm Hemmelrath into Mazars has benefited the association across Central and Eastern Europe, Mazars has said. In addition to strengthening the group’s German offering, the merger has also bolstered its teams in the Czech Republic, Hungary, Poland and Romania – countries where Hemmelrath also had offices.

The co-ordinator of Mazars in Eastern Europe, Jean-François Salzmann, said the merger in Romania has created a well-balanced firm. “Synergies could work from the very start of the merger as Hemmelrath enjoyed well-developed tax and legal activities,” Salzmann said. “Mazars on its side could build on existing accounting and audit activities. As a result, the merged structures form a very balanced organisation with four business lines of the same importance.”

The merger has tripled the size of Mazars in Romania. The combined firm has 70 staff, headed by Hubertus Eichler, who was previously the head of Hemmelrath in Romania. Eichler said expansion to about 120 staff is “something which is on our target list for the next three years”.

Salzmann said competition in Romania for talent is fierce and skilled people are “spoiled for choice of opportunities, especially in the accounting and financial services area”. He remains confident, however, the firm can attract the people it needs for growth. Salzmann said the firm is the right size to maintain a “close and human relationship” with staff, while still growing fast enough to offer them challenging work.

Eichler said Mazars Romania’s clientele is virtually all foreign. He estimates about 50 percent are German-speaking, 40 percent are French-speaking and the remainder are from other European countries, India or the US.

Eichler said German and Austrian clients prefer to have a contact partner who can discuss critical issues with them in German. “Several of our clients in Romania prefer to call on Mazars for audit, tax advisory and law services, in spite of their being audited by some of the Big Four in their home country,” he said. “They find it easier to raise critical issues in German and they also prefer to be able to present conclusions to the board in the same language.” Eichler claimed Mazars is the sixth largest firm in Romania, behind the Big Four and the BDO International representative.

Hemmelrath was previously a member of RSM International, although an entity known as RSM Hemmelrath will continue to be a member of RSM and serve the network’s clients as long as it has not been replaced in the various countries.

Eichler said the firm decided to join Mazars because the group “shares the same values and vision”. He added: “In Romania, as well as in Eastern Europe, Hemmelrath was looking at stabilising its position. We achieved this by joining Mazars, who already had a very strong presence in the core Eastern European markets.”

Eichler said talks to broker the merger had occurred for some time. “The merger is not something which happened on the spot, we were already in discussions. In-depth discussions and due diligence work started at the end of 2006 and the merger was concluded legally at the beginning of April, to come into effect retroactively as of 1 January 2007.” 

Carolyn Canham

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