The Magic Circle lost ground in the global M&A rankings as Freshfields Bruckhaus Deringer, Linklaters, Allen & Overy (A&O) and Clifford Chance (CC) all lost places to US rivals, with London-headquartered firms badly impacted by a jittery European deals market that saw a large number of deals collapse.
Freshfields, Linklaters, A&O and CC all slid down Thomson Reuters’ legal advisor rankings for the total value of deals completed during 2014.
Freshfields performed best going from fifth to seventh for global M&A advisory work, as Linklaters was overtaken by a host of US firms including Weil Gotshal & Manges, Simpson Thacher & Bartlett and Debevoise & Plimpton as it fell from sixth to 17th place. A&O dropped one place to 19th and Clifford Chance fell to 29th as it failed to capture as much big-ticket work as in previous years.
The slump came amid a sharp fall in the size of the European M&A market, with the value of deals completed in 2014 for European companies falling 7.2% from $629bn to $584bn. The global picture was much brighter, with a 15.1% rise in the size of the M&A market taking the value of deals completed during 2014 to $2,456bn. However, US firms were the biggest beneficiary of that rise as the deal value for US companies rose 29% to $1,138bn. Weil, Gotshal & Manges took the top spot for global M&A deals by value from Skadden, Arps, Slate, Meagher & Flom, rising 11 places as it completed 204 deals with a value of $407bn.
Boosted by its advisory role for Vodafone on its $130bn sale of its stake in Verizon, Slaughter and May was the best performer of the London-headquartered firms after Freshfields, jumping from 28th to 12th in the legal advisory rankings for M&A. Macfarlanes also benefitted, with its deal of a lifetime securing the firm a spot in the top 25 firms for M&A, rising from 302nd to 22nd.
Worldwide M&A deals completed
• Weil Gotshal & Manges – $407bn – 204 deals
• Simpson Thacher & Bartlett – $313bn – 156 deals
• Wachtell Lipton Rosen & Katz – $308bn – 70 deals
• Davis Polk & Wardwell – $298bn – 142 deals
• Jones Day – $286bn – 416 deals
• Skadden Arps Slate Meagher & Flom – $252bn – 197 deals
• Freshfields Bruckhaus Deringer – $240bn – 205 deals
• Latham & Watkins – $234bn – 310 deals
• Baker & McKenzie – $233bn – 251 deals
• White & Case – $231bn – 183 deals
Although Europe saw a pronounced uptick in announced M&A activity, jumping from $561bn in 2013 to $870bn in 2014, deals that were actually completed during 2014 had a combined value of $584bn, down from $629bn in 2013. Deal volume did see a small increase with 300 extra transactions taking the total completed from 10,932 in 2013 to 11,271 last year.
US firms capitalised on the growing importance of the US capital markets with a large jump in rankings which saw them make up the entire top five on deals completed with European involvement. Simpson Thacher led the way rising from 22 in 2013 to first place for 2014 by value with $218bn and 62 deals under its belt. Following closely behind was Davis Polk which acted on 42 deals totalling $213bn, moving it from 26 to second place in 2014. Weil jumped nine places from 12 to third with its $190bn from 76 deals with Bakers and Jones Day rounding out the top five with $173bn from 146 deals and $172bn from 184 deals respectively.
Freshfields was the highest placed Magic Circle firm at sixth with $171bn, a drop from its second position last year, though less than Linklaters which suffered a 9.2% drop in market share with a total deal value of $130bn taking it to 15 after winning the top spot last year. Despite a large difference in total value, CC with $73bn worth of deals completed, was in 16. A&O led both CC and Links making it to 12th place with $138bn from 155 deals.
De Brauw Blackstone Westbroek was the highest placed continental-based firm, making it into the top ten with $153bn from 21 deals. Bredin Prat and Hengeler Mueller also made the top 25 with $50bn and $48bn respectively.
EMEA M&A deals completed
• Simpson Thacher – $218bn – 62 deals
• Davis Polk – $213bn – 42 deals
• Weil Gotshal – $190bn – 76 deals
• Baker & McKenzie – $173bn – 146 deals
• Jones Day – $172bn – 184 deals
• Freshfields – $171bn – 169 deals
• Debevoise – $170bn – 22 deals
• Slaughter and May – $168bn – 49 deals
• Wachtell – $167bn – 8 deals
• De Brauw – $153bn – 21 deals
Slaughter and May secured the top spot for UK deals, up 20 places as it advised on deals worth $158.5bn involving UK-based companies. With tax inversion deals from US companies into the UK having been all the rage in 2014 and US financial products such as high yield increasingly used to fund major M&A in 2014, 10 US firms secured places in the Top 25 legal advisory rankings for deals completed last year. Debevoise was one of the biggest beneficiaries, ranking seventh with five blockbuster deals involving UK companies that were worth a total of $133.8bn.
Despite a weakened deal market across Europe, the appetite for UK takeovers was strong, pushing the total deal value for M&A involving UK companies up 31.2% to $372.7bn. Linklaters was the only Magic Circle firm to lose ground, falling from 1st place to 14th as it executed 11 fewer deals (72) and carried out deals worth a combined $33.2bn. Freshfields overtook Linklaters by deals value, becoming the best performing Magic Circle firm with an international expansion strategy, but Linklaters still outperformed rivals CC and A&O.
Clifford Chance and A&O also completed fewer deals but that came as a result of pushing their resources into a greater amount of big-ticket work, with executed total deal value of UK deals up at both firms.
UK M&A deals completed
• Slaughter and May – $159bn – 38 deals
• Simpson Thacher – $156bn – 26 deals
• Weil Gotshal – $147bn – 21 deals
• Davis Polk – $143bn – 12 deals
• Hogan Lovells – $142bn – 45 deals
• Jones Day – $140bn – 74 deals
• Debevoise – $134bn – 5 deals
• Wachtell – $133bn – 3 deals
• Macfarlanes – $133bn – 13 deals
• Allens – $132bn – 7 deals