A&O and Shearman plan ‘unparalleled’ $3.4bn merger
The proposed tie-up, driven by clients’ needs, would span 29 countries and marks a “transformative moment”, say the duo.
In one of the meatiest transatlantic mergers of its kind in recent legal history, Allen & Overy and Shearman & Sterling will join forces to create what they claim to be the only global firm to offer US law, English law, and local law capabilities “in equal measure”.
The ‘Magic Circle’ London firm and its New York-based rival would together comprise 800 partners and 3,900 lawyers across 49 offices in 29 countries, with combined revenues of $3.4 billion.
The proposed merger—under the new name of Allen Overy Shearman Sterling or A&O Shearman—would make it the third largest integrated law firm in the world, subject to customary closing conditions including a vote of each firm’s partners.
The news comes less than three months after Shearman and Hogan Lovells called off merger talks, deciding it was “not in the best interest of either firm,” according to a joint statement in March.
As part of the new tie-up, Shearman & Sterling will access a “dramatically expanded” global offering across practice areas, and Allen & Overy will “benefit from increased board-level recognition and expanded access to a corporate client base in the US”, enabling them to “capitalise on global macro trends including energy transition, technology, and private capital”.
The two say the move represents an “unparalleled combination” and is a “a transformative moment for our clients, our people, and the legal community at large”, driven by clients’ needs.
Kindred spirits
Speaking with Hakki in a corporate video about the merger, Wim Dejonghe, senior partner at Allen & Overy, said that operating on a global level for clients is “increasingly complicated, and a firm that can help them and service them at this level around the world is unique”.
Senior partner at Shearman & Sterling, Adam Hakki, added that Shearman has always thought of Allen & Overy “as a kindred spirit”.
In a press statement, Dejonghe said: “This combination of two great firms is such an exciting step for us. Both firms have a history of excellence, and together we think A&O Shearman will be a firm unlike any other in the world.
“We have listened to our clients and their requests for the highest quality advice to help navigate the demands they face, and to do so in an integrated and globally consistent way. We, A&O Shearman, will do this by accelerating our ability to bring the best of both firms, regardless of geography.”
He added: “What excites me about this merger is the complementary cultures of our two firms. We have striking similarities across the board, and I believe we are going to be wonderful partners to one another on this journey.”
'Unparalleled' global offering
Hakki said that “client need for global elite firms has never been greater” and that clients are “calling for integrated global legal solutions and advice”.
“Merging with Allen & Overy will dramatically accelerate our ability to meet their needs in an increasingly complex environment.
“Allen & Overy is an outstanding firm whose work we have long admired and thought of as a kindred spirit. We have both always placed great emphasis on attracting and retaining top talent, were early to globalise, and are relentlessly focused on quality, excellence, and collaboration. “
He went on: “This is truly a game-changing moment for both firms that will create an unparalleled offering for our clients. It is also a fantastic opportunity for our people to be part of a transformative transaction and an institution of such significance, and we look forward to recruiting even more stellar talent in the coming years.”
Four years ago, Allen & Overy’s attempt to merge with US firm O’Melveny & Myers collapsed, after the two parties failed to agree on a valuation, according to the Financial Times. The firm said on its blog last December that when merger talks with O’Melveny & Myers ended, “it became clear to A&O’s leadership that a change of direction was needed if its US ambitions were to be realised.”
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