EY Breakup Plan Doomed by Miscalculations and Powerful Opponents

Ernst & Young's planned breakup of the firm into separate businesses has been abandoned. The US operation had an effective veto over the deal, resulting in concerns that overseas operations could sell off their consulting businesses on their own. The failed breakup effort could result in rival firms

April 12, 2023 . 10:27 PM

1 min read

Ernst & Young’s planned breakup of the firm into separate businesses has been abandoned.
The firm spent $600m and more than a year working on the split.
The US operation had an effective veto over the deal, which it used to try to extract more concessions for the auditors, before deciding to vote down the plan.
There was concern that EY’s overseas operations could sell off their consulting businesses on their own.
The failed breakup effort could result in rival firms poaching EY’s staff amid a broad shortage of auditors.