Allen & Overy has conceded the ‘compelling synergies’ between it and O’Melveny & Myers were not quite enough to seal a long sought-after tie-up, having today (2 September) said they were calling it a day on merger talks.
The news comes after months of market speculation since a possible merger between the Magic Circle giant and the Los Angeles-bred firm first emerged in spring 2018.
For a potential merger of this kind, the process had been unusually long-winded with few details coming to light along the way, with the need to align A&O’s remuneration to make it more akin to a US structure, as well as culturally assimilating the two firms often cited as profound stumbling blocks to an already complicated deal.
There had also been talk of factions in London between a handful of dissenting influential corporate partners at A&O and management, while disputes partners had been more pro-merger, given the significant strength of O’Melveny’s stateside litigation practice.
The foiled attempt will doubtless have proved a body blow to senior partner Wim Dejonghe and managing partner Andrew Ballheimer, both of whom have had building out a credible US business at the top of their agenda since 2016 when they took up their management roles.
Success would have created an international player with more than 3,000 lawyers and combined revenues of around £2.4bn.
A&O said in a statement: ‘Allen & Overy and O’Melveny & Myers have held discussions about a possible combination and, despite agreeing that there were some compelling synergies between us and that it was sensible to explore a possible deal in some detail, we have mutually decided not to continue these discussions. Both firms have developed a great deal of mutual respect and expect to remain in close contact in the service of our shared clients.’
The firm insisted that building its presence in the US remained the ‘highest priority’. ‘We will significantly increase our immediate focus on lateral individual and team hires, while remaining open to considering opportunities for larger combinations that may arise in the future,’ the statement added.
A spokesperson for O’Melveny concluded: ‘O’Melveny has concluded that the firm’s best course is to continue executing on its strategic plan—which has led to an unmatched culture, deep client partnerships, and record financial performances.’