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Allen & Overy enters merger talks with US law firm O’Melveny

Allen & Overy (A&O) has entered merger talks with US firm O’Melveny & Myers which could create a £2bn global law firm, Advisory Excellence understands.

The magic circle firm has long desired a US merger and talks are thought to have been progressing for a number of months with senior partner Wim Dejonghe and managing partner Andrew Ballheimer thought to be running the talks.

A&O has made several overtures towards the US in recent years, breaking its lockstep for the first time to bring in several US partners nearly two years ago.

Since then, rumours of need to expand in the US had circulated with O’Melveny frequently mentioned as a merger candidate for the magic circle firm.

A spokesperson for A&O said: “While we have said for several years that we are open to considering a merger with the right partner in the US, we talk to many law firms in many countries all of the time and we do not comment on market speculation and rumours regarding any particular firm.”

A&O has hired from O’Melveny in the past, bringing in Barbara Stettner, Chris Salter and Charles Borden as partners in July 2011 to open the firm’s Washington DC office. Five years earlier, A&O turned to O’Melveny when hiring banking partner Elizabeth Leckie to bolster its New York office.

One West Coast-based partner at a rival firm told Advisory Excellence: “Everyone knows it’s been A&O’s strategy for a while to expand their global footprint. They need to do something, A&O hasn’t got the US presence that it would ideally like.”

“Does it surprise me?” added the partner. “No.”

While rumour has circulated for several years over A&O’s US expansion plans, the firm was thought to have been cool on the idea of merger.

Market sources indicated that Shearman & Sterling was being touted for a potential major US tie-up, though Ropes & Gray and Fried Frank had also been mentioned in the same vein.

Of its existing US relationships, A&O is thought to work frequently with Fenwick & West, primarily on intellectual property matters.

A spokesperson for O’Melveny said: “We have no plans to merge and never have.”

Data showed A&O generated £1.5bn in turnover for the 2016/17 year, making £666m in net profit with average per equity partner of £1.5m.

O’Melveny generated $738m (£524m) last year while bringing in $335.4m (£238.1m) with PEP of $2m (£1.4m).

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Berwin Leighton Paisner and Bryan Cave to merge in April

Two legal firms will form a global brand with revenues of more than $900 million. Their Asian coverage will expand.

Berwin Leighton Paisner and Bryan Cave will combine as Bryan Cave Leighton Paisner in April 2018, according to a statement from the firms.

The new entity will have an international practice and sector teams in 32 offices across 11 countries and approximately 1,600 lawyers, and will be led by co-chairs Therese Pritchard and Lisa Mayhew.

In Asia, Bryan Cave Leighton Paisner will have a greater presence than they had so far. The reach of the two firms will extend with offices in Beijing, Hong Kong, Shanghai, and Singapore.

Mobile-based Hand Arendall merging with Panhandle law firm

Alabama law firm Hand Arendall has announced a merger with Florida Panhandle firm Harrison Sale McCloy, creating a new regional firm to be known as Hand Arendall Harrison Sale LLC.

Hand Arendall announced the agreement Wednesday and said it would be effective Jan. 1. Hand Arendall Harrison Sale will have about 85 lawyers, with Alabama offices in Mobile, Birmingham, Fairhope and Athens and Florida offices in Panama City, Destin and Santa Rosa Beach.

According to information provided by the new company, Harrison Sale McCloy founding partner Franklin Harrison will serve as managing lawyer for Florida. Hand Arendall’s managing lawyer, Roger Bates, has been named managing lawyer for the new firm.

Hand Arendall was founded in Mobile in 1941 and has offered services “in all areas of traditional civil practice,” according to company information. Harrison Sale McCloy was founded in 1983 and likewise handles a broad spectrum of legal matters.

According to information released by Hand Arendall Harrison Sale, talks between the two firms began in early 2017.

“In a dynamic and ever developing legal industry, we made a strategic decision to continue to expand westward from our original office in Panama City four years ago,” said Franklin Harrison. “Hand Arendall was strategically exploring an eastward expansion along the Gulf Coast.  After initial meetings and several interviews, we decided to team with Hand Arendall forming a new firm of Hand Arendall Harrison Sale.  It is an exciting next step in the strategic growth plan of both firms.”

Regulators May Oppose T-Mobile-Sprint Deal Even Under Trump, Analyst Warns

Wall Street is souring on the idea that the Trump administration will go easy on mergers, and that’s hitting one of the most talked about merger candidates right in the stock price.

Shares of wireless carrier Sprint (S, -2.53%) slumped 2% to $7.14 on Tuesday after Deutsche Bank telecom analyst Matthew Niknam cut his price target on the stock to $7 from $8 due to concerns that a merger with a rival carrier would be blocked. Despite renewed rumors of a deal to combine with T-Mobile, Sprint shares have dropped 8% over the past month, even as the S&P 500 Index gained 4%.

Sprint, majority owned by Masayoshi Son’s Softbank Group, has been seen as the one of the most likely merger candidates since Trump was elected. Under the Obama administration, regulators blocked a 2011 deal for AT&T (T, +0.55%) to acquire T-Mobile and signaled a similar outcome was likely in 2014 when Sprint showed interest in combining with T-Mobile. The regulators were concerned that reducing the number of major wireless carriers from four to three could hurt competition and the combination could also lead to massive layoffs.

But Trump’s pro-business stance was at least initially seen as leading to a friendlier outlook from antitrust regulators. Sprint shares jumped from around $6 just before Trump was elected to almost $10 earlier this year on optimism about a possible deal with T-Mobile (TMUS, -0.54%) .

Since then, however, the rosy view on mergers has all but disappeared amid the administration’s chaotic tenure and the increasing likelihood that Democrats will make gains in the 2018 election, Niknam wrote on Tuesday, citing “the risk that more populist/less corporate-friendly sentiment may become more pervasive in DC.”

“In fact, we note that the Democrats’ ‘Better Deal’ agenda (unveiled in July 2017, targeted towards 2018 elections) highlights ongoing corporate consolidation as a threat to US consumers, and proposes sharper scrutiny of potential deals,” the analyst added. Regarding Sprint combining with T-Mobile, Niknam said he was “very bearish on the prospects for deal approval.”

T-Mobile, the third-ranked carrier, and Sprint, the No. 4 carrier, have also been discussing a deal that would combine the two carriers without paying Sprint shareholders much if any of a premium over the recent stock price, Bloomberg reported two weeks ago. The deal proposal also would not include a termination fee if blocked by regulators, given the high risk of antitrust opposition, Bloomberg noted.

Cable companies Comcast (CMCSA, -0.32%) and Charter Communications (CHTR, -0.32%) that are starting to offer wireless service themselves wouldn’t draw much antitrust scrutiny if they bought Sprint, but now “appear less interested in outright ownership,” Niknam added.