The proposed agreement between the fellow Big Four members is still subject to regulatory approval. As such both will continue to operate separately for the time being.
The merged firm will operate under the EY name as part of its Nordics Region.
“This agreement draws on the complementary strengths of EY and KPMG Denmark,” says Erik Mamelund, regional managing partner for EY Nordics.
“Until regulatory approval is obtained it would be premature to say anything further.”
The move would see it absorb 1,500 employees across 21 offices.
KPMG’s Danish operation, which involves 150 partners, generated £160m in fees in 2011.
KPMG global chairman Michael Andrew said in a statement, "I can confirm that our Danish member firm has decided to leave the KPMG network. We believe a number of non-equity partners and staff will make a positive choice to remain with KPMG. We remain committed to having a strong, effective and focused firm in Denmark that can serve local and global clients and provides the market with the choice of at least four large professional service firms."
The Nordic region has proven a competitive area in recent years. Baker Tilly Denmark acquired KPMG Randers in 2011.