The New York Times reported Monday that a sale could be announced later this week.
Andersen, the smallest of the Big Five, has lost more than 30 clients since the Enron bankruptcy on Dec. 2, including longtime clients Freddie Mac, Merck pharmaceuticals and Delta Airlines.
The 88-year-old accounting giant has seen an exodus of associates as it faces a growing number of lawsuits from Enron shareholders and potential obstruction of justice charges for shredding thousands of documents related to the collapse of the Houston energy trading company.
The Wall Street Journal reported lawyers for Andersen are negotiating with the U.S. Justice Department to reach a settlement to avoid a criminal indictment.
Andersen executives reportedly concluded that a sale or merger was the best option, although the name of the fifth-largest U.S. accounting firm might continue for Enron-related liability purposes.
The Times said talks began in earnest last week between Andersen chief executive James Berardino and Deloitte & Touche's James Copeland Jr.
The Journal said a Chapter 11 bankruptcy was possible.
Deloitte and Andersen have similar entrepreneurial business cultures that give great autonomy to branch officers. Andersen hired former Federal Reserve Board Chairman Paul Volcker to institute restructuring and reforms, including separating auditing from consulting services.
Chicago-based Andersen had about 2,300 clients and 84,000 employees at the end of its fiscal year in August 2001 with revenues of $9.3 billion. Deloitte had 95,000 employees in 140 countries at the end May 2001 with $12.4 billion in worldwide revenue.
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