“KPMG Consulting Inc. is close to a deal to acquire Arthur Andersen’s U.S. consulting arm and parts of the overseas consulting business for more than $250 million, accelerating the breakup of the beleaguered accounting firm, people close to the situation said,” writes Robert Frank in today’s Wall Street Journal.

“A deal could be announced within the next week, the people said, although they cautioned that the talks are continuing and may not result in an agreement. In particular, Arthur Andersen’s pending legal problems, stemming from its botched audits of energy-trading company Enron Corp., may prevent or delay any deal.”

“Andersen and KPMG Consulting declined to comment.”

“Andersen has been negotiating to sell off most of its auditing and consulting operations since it was indicted in March on criminal obstruction of justice charges. Most of Andersen’s largest international auditing and consulting affiliates have split from the firm, and many of its U.S. auditors and tax experts have agreed to join rivals. The U.S. consulting operation is the last big chunk of Andersen that hasn’t signed a deal with a rival.”

“Under terms being discussed, KPMG Consulting could pay more than $150 million in cash to Arthur Andersen, more than $50 million in compensation to partners and at least $50 million for the firm’s receivables. The overseas consulting businesses included in the deal would be only those that haven’t already jumped ship to other firms.”

“The deal may not be contingent on Arthur Andersen filing for bankruptcy. While some observers have said that a bankruptcy filing is necessary to shield any buyer from Andersen’s legal liabilities, people close to the talks say KPMG Consulting may be able to structure the deal to isolate the consulting business from legal claims.”

“Andersen’s consulting business employs 3,000 people in the U.S. and reported global revenue last year of $1.43 billion. The U.S. accounts for more than half of Andersen’s consulting business, with reported revenues last year of $844 million.”