SNR Denton and Salans prepare for September merger vote
22 August 2012 | By Joshua Freedman
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Salans and SNR Denton have reached the advanced stages of negotiating a £760m merger, with the two partnerships gearing up to approve the deal in a vote next month.
Management figures at the firms are planning to put the proposals to partners for a September poll, over six months after the European and US duo entered into tie-up discussions.
The pair are thought to have started discussing a merger late last year, with The Lawyer first reporting the talks in February (14 February 2012).
Sources close to the firms suggested there is still a chance that talks will collapse before they reach a vote, with negotiations said to have encountered political obstacles. Firm leaders are currently carrying out due diligence.
SNR Denton is thought to be most interested in Salans’ profitable Paris and Moscow offices, while Salans is looking to beef up its international network, nearly 15 years after predecessor Salans Hertzfeld & Heilbronn launched in New York through a merger with Christy & Viener (22 September 1998).
Leadership on both sides is understood to have communicated little about the plans to the respective partnerships, but Salans partners have nonetheless been asked to sign confidentiality agreements.
There is also a lack of clarity over the name the combined firm is set to take, with one option thought to be an entirely new brand not incorporating the Salans or SNR Denton names.
A source close to the matter commented: “Neither brand’s so strong – that’s the joke of it. It’s two weak firms.”
An SNR Denton partner said he had no inside knowledge of the potential combination with Salans but said the message from global chairman Joe Andrew and CEO Elliott Portnoy (pictured) at the US firm’s partnership conference in Orlando in May was that the firm was on the lookout for a European merger suitor.
He commented: “A lot of management time is going into working out an appropriate partner to merge with. [The message at the conference was] the firm is definitely looking at how it can expand its European operations with a suitable merger candidate. It’s very much a strategic vision of having a strong footprint across Europe.”
The SNR Denton talks were also informally discussed at Salans’ partner retreat in Madrid in the same month (21 May 2012).
An SNR Denton spokesperson said in a statement: “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.
SNR Denton, formed out of the combination of London’s Denton Wilde Sapte and US firm Sonnenschein Nath & Rosenthal in 2010, held brief merger talks with now-defunct US rival Dewey & LeBoeuf earlier this year on the eve of the latter firm’s collapse (2 August 2012). Like Salans, Dewey counted Moscow and Warsaw among its trophy offices.
Salans, which operates a calendar-year financial year, brought in fee income totalling €206.3m in 2011. SNR Denton’s business comprises a US LLP and a separate UK LLP covering Europe, the Middle East and Asia, with the former turning over $474.5 in 2011 and the latter earning revenues worth £145m for the 2010-11 financial year.
Based on current exchange rates and SNR Denton’s £317.2m combined turnover for the first half of 2011-12 (28 November 2011), a merger between Salans and SNR Denton would likely produce a firm with total revenues of roughly £760m.