The negotiations, described as being ‘advanced’ follow BDO’s integration of the Grant Thornton offices in Cape Town and Port Elizabeth in February this year.

Once completed, the latest transaction will result in a firm with 1,500 partners and staff operating from seven different offices in South Africa, and a Johannesburg office of almost 900 partners and staff.

Mark Stewart, BDO South Africa CEO, who will continue to lead the firm, said the development is a key part of BDO’s business strategy, both in South Africa and globally to double the revenue of the organisation by the end of 2018 through the addition of new advisory services and an enhanced audit offering.

‘The integration of Grant Thornton Johannesburg into BDO will create the largest mid-tier accounting firm in South Africa with fees in excess of R1.2bn (£69m), thus positioning the firm as a credible alternative to the four largest auditing firms in South Africa,’ he said.

The transaction is expected to be effective during the fourth quarter of 2018.

Stewart said: ‘The audit profession is undergoing huge change currently, and the demand for in-depth, technical and industry expertise is critical. BDO will now be in a far better position to take advantage of new opportunities in the market and to provide clients and employees with a significant alternative to the competition.’

Last month KPMG South Africa announced it is to cut employee numbers by around 400 and bring in senior KPMG partners from across the firm’s international network in a bid to reshape the business following a series of crises over the past year. The firm is facing investigations by regulators over its work for a failed bank and also for companies connected with the controversial Gupta family, and has lost a number of high profile clients.

Report by Pat Sweet