Salans and SNR Denton latest firms to hold merger talks
Salans and SNR Denton are in talks over a potential tie-up that would create a transatlantic giant with a combined turnover in the region of £760m.
Salans HQ, London
Senior management at the two firms are understood to have been discussing a tie-up since late last year and are close to a deal, according to a source close to the firms.
It is unclear what form the merger would take in terms of financial integration. SNR Denton itself is structured as a Swiss Verein, with one profit pool in the US and a separate one in Europe, the Middle East and Africa following the merger of City firm Denton Wilde Sapte and US firm Sonnenschein Nath & Rosenthal in 2010 (26 May 2010).
SNR Denton’s recent combination and a lack of recent data from Salans make a precise calculation of the firms’ combined value difficult. But based on results for the first half of 2011-12, when the firm posted revenue of £317m (28 November 2011), SNR Denton should be in for full-year results of around £600m.
A tie-up with Salans – a €196.5m firm in 2010 (28 March 2011) – would create a firm with projected worldwide turnover of around £760m.
Salans has long been linked with a merger following a rocky time, especially in London, where it was hit by the resignation of seven partners and two consultants in the City in November as part of US firm Locke Lord’s London launch (7 November 2011). One of the partners has since joined CMS Cameron McKenna after originally planning to move to the Texan firm (13 February 2012).
Salans’ Paris practice is seen as much stronger than its London offering, and its international capacity is considered an attractive feature for a merger suitor.
A market commentator said: “[Salans is] just a very sub-standard hotchpotch of a practice with poor leadership. It’s like a poor man’s version of Baker & McKenzie. Paris is magic circle quality but London is very average.”
The firm elected litigator Smeetesh Kakkad as its London managing partner earlier this year, replacing Howard Cohen (16 January 2011). The firm is run internationally by Paris-based global managing partner Dariusz Oleszczuk (28 October 2010).
SNR Denton, meanwhile, has suffered a troubled year and a half since its merger, with profit dropping dramatically in the UK LLP in 2010-11 (7 February 2012). Profit per equity partner in the UK LLP also dropped 35 per cent in the same financial year (20 June 2011).
An SNR Denton spokesperson said: “We enjoy strong relationships with many law firms around the world. However, we never comment on rumours about specific discussions or our continuing efforts to enhance SNR Denton’s already robust global presence with locations in over 40 countries.”
Salans declined to comment.
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Readers' comments (14)
Anonymous | 14-Feb-2012 2:23 pm
Let me guess, "A market commentator" is a partner from the rejected suitor Pinsent Masons LLP.
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Anon | 14-Feb-2012 2:29 pm
This makes perfect sense in terms of building a global platform and developing greater scale.
It is true that the London office of the combined firm will still be relatively weak, particularly compared to Paris and the U.S. offices, but the enlarged firm will have greater resources to invest there.
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Anon | 14-Feb-2012 3:32 pm
@ Anon 2:29 pm - It's not just that the combined firm will have greater total resources, it will also save a huge amount of costs.
For example SNR will not now have to expend large amounts developing in Paris, nor Salans building a platform in the U.S. Resources can therefore be focused on developing areas where both firms are weak, such as South America.
From a pure business perspective this is a no-brainer.
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Cynic | 14-Feb-2012 3:38 pm
Sorry to be a troll on this one, (I do try be positive normally), but do they really think merging this lot together will make things better? Isn't this like Betamax merging with Kodak Film, and then merging a year later with Amstrad to create a huge conglomerate of under-performance that's already missed the boat?
If these were companies and you could consolidate them and then asset strip to be left with a small solid golden core to then build on, I'd see the point. But like this....?
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Anon | 14-Feb-2012 3:50 pm
@ Cynic above is so stupid that they apparently don't know that Betamax was a recording format rather than a company.
Neither do they understand the meaning of the word 'conglomerate'.
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Anonymous | 14-Feb-2012 4:11 pm
@ Cynic 3.38 pm - I disagree. As someone who's worked with both firms its obvious that they'll never be magic-circle calibre firms but they both have quality practices. Denton's energy group would receive a major boost if this goes through and they can capitalise on Salan's top notch CSI oil and gas team. The deal would also finally give Denton's some continental europe coverage - something thats been missing since the Denton Hall / Wild Sapte days.
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Anonymous | 14-Feb-2012 4:34 pm
having met some of the european salans partners, they are savvy and smart (unlike some of their competitors). They don't look at partners being entitled but rather building out strong businesses and readjusting where things don't work rather than falling into the usual big firm trap of pigs at the trough and a sense of entitlement.
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Cynic | 14-Feb-2012 5:05 pm
@Anon | 14-Feb-2012 3:50 pm
Calm down, luv.
Ever heard of poetic licence?
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Whoop there it is | 14-Feb-2012 5:11 pm
Looks like simple maths to me:
1 basket case + 1 basket case = a transatlantic basket case.
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Anonymous | 14-Feb-2012 5:39 pm
@ Whoop there it is 5.11 pm - thats what people used to say about DLA Piper and now they're a behemoth. Say what you want but this is the direction that the market is moving in and at least these guys will enjoy some semblence of first-mover advantage. Best of luck to them... heaven knows that two mergers in as many years won't be easy for SNR.
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james hill | 15-Feb-2012 1:32 am
Hmmm. Why SNR would want to tie up with another European room is difficult to understand. Having worked with European as wellas USA lawyers - European lawyers simply do not have the breadth of training that USA lawyers have. Nothing against European lawyers, but the educational approach is so much narrower.
SNR still has to manage the Denton under performance as well.
Why would they tie up? Dilution of quality in search of money. What the heck - that might be reason enough.
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JamieJames | 15-Feb-2012 9:33 am
James, according to your logic no US firm would ever merge with a European Law firm - frankly I am surprised US lawyers simply dont dominate the world.
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It started with the Tower of Babel... | 15-Feb-2012 12:15 pm
All mid-tier and lower will need to merge. They will then need to lean six-sigma and whatever else to strip away costs: this might include outsourcing to CPA global etc. The law firms of the future will be amalgamations of what we have now, and much smaller. There will be fewer frontline lawyers and more focus on high quality turnaround with low office numbers akin to some US firms in the City. Those that cannot stomach the aforepredicted should seriously contemplate other careers as the Ice Age has come and another one will do the same damage as we saw in 2008/9.
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David Li Rot | 17-Feb-2012 11:54 am
When ISN'T Salans in merger talks? But not all partners want to merge. Paris wants to stay as is and views any merger with a non-Gallic firm as some kind of Waterloo Revisited moment.
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