Linklaters tumbles from top 10 as public M&A market stalls in 2013

After holding the top spot for two consecutive years, Linklaters has fallen into 13th place in the 2013 UK M&A rankings.

The figures, which are compiled by Thomson Reuters, encompass all deals launched between 1 January and 16 December 2013 that involved a UK party. 

Linklaters’ deal value fell by 72 per cent over the course of the year, due to a drop in the number of transactions it was involved in, falling from 97 to 75. Freshfields’ deal value fell by 61.4 per cent, while its volume shuffled from 70 to 69. The value of Clifford Chances’ M&A deals fell by 86 per cent, from $38.5bn to $20.7bn while its total number of transactions tumbled 14 per cent. Allen & Overy suffered the same fate – its value dropping by 51.8 per cent and volume from 64 to 63 deals (17 December 2012).

Kirkland & Ellis, Shearman & Sterling, DLA Piper, Herbert Smith Freehills and Ashurst also saw their deal values diminish in 2013.

US firms Simpson Thacher and Davis Polk topped the overall rankings, with total UK-related M&A deal values of $142bn and $141.7bn respectively. Slaughter and May is the highest ranking UK firm, taking the third spot having advised on deals worth a collective $137.3bn.

Verizon Communications’ takeover of Vodafone’s 45 per cent stake in Verizon Wireless (2 September 2013) was the largest deal of the year valued at $130bn (£84bn), with each of the top 11 firms ranked in the list advising on an aspect of the deal. Those included Simpson Thacher, Davis Polk & Wardwell and Slaughter and May. 

Macfarlanes, another Verizon Communications adviser, and Hogan Lovells, which was one of the Vodafone advisers, were the only two other UK firms to win spots in the top 10.

Discounting the Verizon/Vodafone transaction, the magic circle sit at the top of the next tranche of firms despite all four outfits seeing their deal value plummet substantially in 2013.

Freshfield’s M&A co-head Simon Marchant said: “The first half of 2013 was one of the poorest on record for general M&A activity. It picked up in the second half but that’s not yet shown up in the figures.”

He added: “The US market has been ahead in terms of recovery in the economic and the M&A cycle. There has been more M&A there so they’ve seen more of an uptick, but that is spreading to Europe.”

Interestingly, all but one UK firm featured in the top 25 by M&A value both this year and last saw a decrease in deal volume. Countering the trend was Hogan Lovells, which saw its deal total increase from 27 to 44 during the period.

Hogan Lovells corporate finance head Andrew Pearson said: ”There’s always an element of luck in these things, in terms of which firm’s clients are doing deals, but we’re seeing the benefit of our transatlantic capability.” A prime example is Hogan Lovell’s advice for the Kodak Pension Plan on its £419m purchase of Kodak’s personal film business in May (1 May 2013). “Our other strength is in the heavily regulated sectors,” he continued. “There’s a lot of activity in the financial services, and energy, natural resources and infrastructure space.”

DLA Piper suffered the biggest loss in volume, as its deal-load fell by 35.7 per cent from 98 to 63.

CMS is the only new UK entry, propping up the top 25. Skadden Latham & Watkins and King & Wood Mallesons (now King & Wood Mallesons SJ Berwin) are among the firms denied a place in 2013.

Total deal volume dropped by 10 per cent over the course of 2013, from 3,567 in 2012 to 3,242. Total deal value was $311.6bn – a 5 per cent drop on 2012’s figure of £327.7bn.

Announced M&A with UK involvement, 2013 until 16 December
Firm Total deal value including net debt of target ($m) Rank Market share (%) Number of Deals
Simpson Thacher & Bartlett 142,036.0 1 45.6 22
Davis Polk & Wardwell 141,680.6 2 45.5 15
Slaughter & May 137,256.7 3 44.1 41
Jones Day 136,094.5 4 43.7 49
Hogan Lovells 135,119.9 5 43.4 44
Weil Gotshal & Manges 134,509.3 6 43.2 20
Baker & McKenzie 133,465.6 7 42.8 29
Allens 132,512.4 8 42.5 11
Debevoise & Plimpton 132,321.2 9 42.5 4
Macfarlanes 130,928.6 10 42.0 11
Wachtell Lipton Rosen & Katz 130,100.0 11 41.8 1
Freshfields Bruckhaus Deringer 31,391.4 12 10.1 69
Linklaters 28,045.1 13 9.0 78
Clifford Chance 20,680.7 14 6.6 59
Hengeler Mueller 16,611.7 15 5.3 7
Allen & Overy 15,461.7 16 5.0 63
Kirkland & Ellis 12,908.7 17 4.1 33
Herbert Smith Freehills 12,406.5 18 4.0 27
P+P Pollath + Partners 9,147.4 19 2.9 8
A&L Goodbody 7,238.7 20 2.3 12
Shearman & Sterling LLP 7,198.9 21 2.3 14
Torys 6,914.1 22 2.2 5
DLA Piper LLP 6,088.5 23 2.0 64
Ashurst 5,716.9 24 1.8 31
CMS 5,626.6 25 1.8 56
Industry Total 311,553.4 100.0 3,242