Deloitte eyes financial advisory firm

Deloitte & Touche Middle East will close an acquisition in the financial advisory sector early next year, according to a senior company official.

The company to be acquired has presence across the Middle East region and is intended to support its existing operations.

“The acquisition is in the negotiation stages and is expected to be made in early 2011. It has regional presence and is an advisory firm. It is a question of synergy to support our existing operations,” said Omar Fahoum, Deloitte Middle East Chairman and Chief Executive Officer.

Deloitte & Touche is the largest professional services organisation in the world with presence in 140 countries across the globe.

In August 2009, the company entered into a transaction whereby it acquired a substantial part of BearingPoint's Public Services Practice. Earlier this year, it acquired PricewaterhouseCoopers assets in Kuwait.

“It has been a successful transaction. We added 100 people [from acquisitions] and a new partner is also joining us. This positioned us exceptionally well. Kuwait is an acquisitive market and many of the Kuwaiti companies have presence outside the country. By nature, they are outward looking and looking for clients,” he added.

As part of its growth strategy, the company continues to expand it team across the Middle East.

“We are continuing to hire. We hired over 1,000 in the past two years taking the total to 2,200 in the Middle East. Our business growth has outpaced headcount growth rate and also have a respectable level of nationals on our board,” Fahoum added.

The company has approximately 170,000 employees across the globe.

The global advisory firm plans to invest $1 billion (Dh3.67bn) into five priority markets in the next five years including the Middle East.

“Deloitte has identified five potential markets globally and Middle East is one of them where we want to scale up presence. Other countries are China, India, Russia and Southeast. The funds will not be equally distributed because it’s unrealistic to have proportional share as markets vary in size and growth rates,” he said.

Media reports said last month that Deloitte is looking at acquisition in Russia. The Times said that its UK unit is holding talks with its Russian counterpart to buy operations which will result in taking about 3,000 employees in Russia and other eight regional countries.

Deloitte is also sanguine about the outlook for the Middle East economies due to sustained development spending by the regional governments.

“The outlook is positive for the region. The global financial crisis certainly impacted the region but not severely. I believe region will do okay, if not well. The oil prices will remain stable which help the governments to have sustained public spending in infrastructure development. We will definitely embark on a number of initiatives that reflect our belief in the growth of the region,” Fahoum said.

He said Deloitte Middle East aims to tap companies with pan-regional presence – such as sovereign wealth funds and family-owned business – as they have ability to engage globally.

Fahoum believes that business activity is picking up but is still far from its peak level.

“M&A and IPO activity has picked up in the region but not anywhere close to its peak in pre-crisis level. We are now seeing some IPOs and modest activity,” he added.

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