Andersen Worldwide's Singapore operation is in merger talks with Ernst & Young, according to a spokesman for the company.
The deal, if completed, would be a blow to KPMG International, which has been trying to merge with Andersen's operations outside the United States.
Andersen affiliates have been seeking mergers with other major accounting firms since the company's US arm was indicted for alleged obstruction of justice in the collapse of Enron.
The Singapore merger would form the city-state's largest accounting and advisory firm.
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The Andersen spokesman, speaking on condition of anonymity, said merger talks were being held in Singapore on Monday.
Ernst & Young in Singapore has not given details of the talks.
PA