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Andersen units begin talks with KPMG

Non-US operations of indicted accounting firm Andersen intensified their battle for survival on Tuesday as talks began with rival KPMG. The firm, founded by a Norwegian, has more than 600 employees in Norway and several major clients including Telenor and Orkla.

Oslo-based partner Erik Mamelund, who heads the Norwegian unit, earlier told newspaper Aftenposten that all of the five other major accounting firms were possible partners. Andersen's non-US units are trying to cut ties to the tarnished image and financial liabilities of Chicago-based Andersen, after it was caught up in the scandalous collapse of energy firm Enron.

On Tuesday, partners in Europe confirmed they were in talks with local KPMG units that would probably see the disappearance of the Andersen name from the continent.

Mike Rake, chairman of KPMG in Europe, the Middle East and Africa, said a combination with Andersen's European units "would be complementary in terms of geographic coverage and industry expertise."

Mamelund said late last week that he hoped the future for his firm would clear up within the next few days or weeks. Other major Norwegian firms using Andersen include Norske Skog, Schibsted and Den norske Bank.

Norwegian roots Andersen's fall from grace is perhaps especially poignant in Norway. The firm's founder, Arthur Andersen, was the son of Norwegian emigrants and spent his early childhood in the Oslo area.

Andersen's mother was from Drammen and his father from the industrial area around the Aker River in Oslo, then known as Christiania. The couple left Norway with their family in 1882 and headed for Plano, southwest of Chicago.

Arthur Andersen was born in Illinois in 1885, but his parents were struggling with unemployment and headed home to Norway when he was just a few months old.

The re-crossed the Atlantic in 1889, but both died before young Arthur was 15 years old. As the middle child of eight, he was forced to start taking care of himself at an early age.

He eventually worked his way through school, took his Certified Public Accountant's exam at age 23 and became the youngest to pass it in Illinois.

He started his own firm, Arthur Andersen & Co, on December 1, 1913