Punongbayan Amper & Co. – The Merger of Audit Firms

Competition is always getting tough for the big audit firms and as what other commonly say “if you can’t bet them, join them”.  “The bigger, the better” also applies as two of the known big firms in the country combine their professional practices. You read it right!  Punongbayan & Araullo (P&A) and Navarro Amper & Co. (formerly Manabat Delgado Amper & Co.) (NA&Co.,) are combining with 34 partners and more than 1,000 employees. NA&Co. is a member practice of Deloitte Touche Tohmatsu, the world’s largest, so far, while P&A is a member of the Grant Thornton International Ltd.


In the current Philippine audit practice, SyCip Gorres Velayo & Co. (EY) leads serving 40% of the market.  Coming in next were Manabat Sanagustin & Co. (KPMG) with 10.9% and Isla Lipana (PwC) with 10.6%. 

In the global audit practice, Deloitte Touche Tohmatsu tops, followed by, in chronological order, PricewaterhouseCoopers, Ernst & Young and KPMG, known as the big Four (Big 4).

The Announcement

In its website, Punongbayan and Araullo informed the public of its signing of Memorandum of Agreement with Navarro Amper & Co. to combine their professional practices.

Dear Valued Clients and Friends:

We are pleased to inform you that Punongbayan & Araullo (P&A) and Navarro Amper & Co. (NA&Co.) are combining their professional practices. As an initial step, P&A and NA&Co. have signed a Memorandum of Agreement with the view of entering into a Definitive Agreement to combine their respective professional practices effective July 1, 2014.

The Combined Firm will be a member of the international network of Deloitte Touche Tohmatsu Limited (Deloitte), the largest Big 4 professional services firm globally.

During the next few months, the two firms will conduct due diligence work and plan for the integration of their operations. A transition team comprising leaders from both firms will develop an integration plan to help ensure a smooth, seamless transition.

The Combined Firm will be known as Punongbayan Amper & Co. Ben Punongbayan, Founder of P&A, has been designated Chairman. Greg Navarro, the current Managing Partner and CEO of NA&Co., will be the Managing Partner and CEO, while Marivic Españo, the current Chairperson and CEO of P&A, will take on the role of Deputy Managing Partner.

When this transaction is completed, the Combined Firm will be one of the largest professional services firms in the Philippines, with greater resources, broader knowledge, and expanded service capabilities. Together, the Combined Firm will have total annual revenues of P1.2 billion, with 34 partners and total personnel of more than 1,000 people.

The management and partners of P&A are excited about this development and are looking forward to continuing to provide outstanding professional services to meet your needs with much wider and deeper professional practice resources.

We will keep you apprised of all significant developments regarding this combination. Should you have any questions during this period, please feel free to contact me, or the P&A partner who is currently handling our engagement with your company.

Very truly yours,

Ma. Victoria C. Españo
Chair and CEO

What it Means?

The merger will indeed create a healthy competition among the largest audit firms as the member of the worlds top firm, NA&Co. takes aggressive steps to be on top in its Philippine practice.  This ambitious move aims greater resources, broader knowledge, and expanded service capabilities for the firm, which will ultimately expected to contribute to an increase in the market share of the combined firms.

The latest market shares of the two combining firms in the latest report of Business World on the top 1000 corporations in the Philippines is 8.3% with P&A having 5.2% share and NA&Co. having 3.1% share. In the 2013 edition of the Business World report, P&A is the 4th largest firm in the country followed by NA&Co. as the 5th.  

With their combined market shares, Punongbayan Amper & Co. will start initially at 8.3% market share and will remain in the 4th place of the Big 4.  We, however can’t predict the synergy that will be brought about by their merger.  8.3% is just more than 200 basis points lower from the 10.6% share of the 3rd placer, PwC.

Maybe, we just have to wait for the merger to be completed, and see whether it will really make a difference in their practices and in the market shares.

Related News

ABS-CBN News, also published an article in its business news section about the merger of the two firms.  A copy of the said article is provided below:

MANILA – Punongbayan & Araullo (P&A) and Navarro Amper & Co. (NA&Co.) have signed a memorandum of agreement (MOA) that aims to combine their respective existing practices into a single partnership.

The two firms will continue to serve their respective clients as separate practices during the MOA period, with the merger to be completed by July 1, 2014.

With the merger, the combined firm will be known as Punongbayan Amper & Co., creating one of the largest professional services firms in the Philippines.

Punongbayan Amper & Co. is expected to earn total annual revenues of P1.2 billion, with 34 partners and more than 1,000 employees.

“I am excited about the positive benefits that this merger will provide our clients and our people: our clients will have access to the resources and service capabilities within the Deloitte global network, and our people will benefit from the opportunities to grow their careers in a bigger firm,” said P&A founder Ben Punongbayan, who will be appointed chairman.

Greg Navarro will be the managing partner and CEO, while Marivic Españo, the current chairperson and CEO of P&A, will be the deputy managing partner.

Let us know what you think! 🙂

Disclaimer: Opinions expressed in this article are that of the author and information provided are for general conceptual guidance for public information and are not substitute for expert advice. Contact support@philcpa.org for more information and if you want to avail professional services. Find us on Facebook!

Orlando Calundan is a CPA who has exposures in FS audit of entities in various industries such as real estate, food/restaurants, manufacturing, service organizations and BPOs, automotive, holding/investment companies and more. He also has exposure on internal audit engagements.

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