KPMG and Andersen are in discussions about merging all of their operations outside the US in a last ditch effort to salvage Andersen from collapse in the wake of the Enron scandal.

A global merger outside the US is seen as the only realistic solution to Andersen's problems, after early discussions over a global merger including Andersen's US business broke down over the potential multi-billion dollar liability which the the firm could face after Enron. Talks with Ernst & Young and with Deloitte Touche Tohmatsu broke down last week.