By Huw Jones
LONDON (Reuters) -Partners in EY are expected to give approval for spinning off the company's consulting arm and listing it on the stock market by the end of the year, a senior EY official said on Tuesday.
Over 13,000 partners - out of EY's 365,400 staff - are due to vote on the divestiture plan in April with the outcome known quickly, said Marie-Laure Delarue, EY's global vice chair for assurance and member of the company's global executive.
"We expect a massive approval, but it's not to say there is still not a lot of work to do," Delarue told Reuters. "A lot of our clients tell us it makes total sense, but you have to do it right. Regulators are, in general, supportive."
Just over half of EY's 145 country networks will vote on splitting each national network into separate auditing and consultancy units. It is a move which does not make sense for all networks, Delarue said.
Country networks which vote to reject splitting up would stay with what remains of EY, which will include advisory, tax and sustainability services alongside auditing, she said.
EY, formerly known as Ernst & Young, is one of the world's 'Big Four' auditors, along with Deloitte, PwC and KPMG. It had revenues of $45.4 billion in the year to June 2022.
The "Newco" will account for $25 billion of revenue and 7,000 partners, with what's left of EY representing $20 billion and 6,000 partners.
The divestiture has raised questions over attracting and retaining auditors when the consulting side has traditionally been better paid, an issue Delarue said regulators have raised.
"We are going to take this as an opportunity to reinvigorate the attractiveness of the profession," she said.
The aim is for "Newco" to be ready for a stock market debut and issuing bonds by the end of the year, Delarue said, declining to give any detail on where the stock would be listed.
The timing will depend on market conditions and could move into 2024, but will likely mean partners reaping windfalls worth millions of dollars each.
The other Big Four firms have indicated they will not be following suit, for now at least.
Britain is already requiring the Big Four to run their auditing and consultancy arms separately by mid-2024 to minimise conflicts of interest from providing services to firms they are also auditing.