Allen & Overy, a law firm based in the UK, is reportedly considering a merger with Shearman & Sterling, a firm based in New York, worth $3.4 billion. If the merger goes through, it would be one of the largest legal deals between the two countries.
The merger between the two firms is pending partner approval and will result in the formation of a large legal practice with $3.4bn in combined revenues and approximately 3,900 lawyers across 49 offices.
The recent merger between Shearman and a US law firm is notable as it’s the first time an elite London-based law firm has joined forces with a US counterpart since 2000’s Clifford Chance and Rogers & Wells merger. This deal follows Shearman’s decision to abandon merger discussions with Hogan Lovells earlier in the year.
The merger marks an important step for Allen & Overy’s goal of establishing a presence in the US market. A previous attempt to partner with California law firm O’Melveny & Myers did not come to fruition due to disagreements on valuation four years ago.
“[The deal] supercharges our ability to serve clients in the US market, which has long been a strategic priority,” said Wim Dejonghe, the senior partner at A&O. “Both firms have a history of excellence, and together we think A&O Shearman will be a firm unlike any other in the world.”
Allen & Overy is the significantly larger partner, reporting revenues of £1.9bn and employing a total of 5,800 staff globally, while Shearman & Sterling has 1,350 staff and made revenues of $907m last year.
In February, S&S announced it was laying off staff in the US, and it also saw the departure of a number of partners after the aborted talks with Hogan Lovells earlier this year.