Lovells in talks with Spanish firm

Lovells is in merger talks with Spanish-based Castro Sueiro & Varela Abogados and discussions with the firm are reaching a critical stage.

A source close to Lovells says the talks with the Spanish banking and derivatives practice are now at a "sensitive stage".

It is understood that Lovells had met with another Spanish firm, Despacho Melchor de las Heras Albiñana & Suárez de Lezo, more than five months ago to discuss a merger.

Then Melchor wanted to retain its independence, although sources close to Lovells say that it may be interested in coming back to the table.

However, Melchor partner Mariano Bautista says: "We're happy being independent."

Castro is a niche player, with just three partners who all double as its joint managing partners.

Lovells and Castro refused to comment.