Third-quarter dearth fails to dampen M&A figures as A&O, CC rule the roost

Allen & Overy (A&O) and Clifford Chance have maintained their lead in announced European M&A deals during the first three-quarters of the year, despite an alarming slump in deal volume during the last quarter.

In European deals completed, Freshfields Bruckhaus Deringer came top with almost $240bn (£117.1bn) worth of transactions, in front of A&O, Clifford Chance, Linklaters and Sullivan & Cromwell. Deals in the bank may prove to be the most valuable by year-end if the credit crunch takes hold.

Worldwide M&A value in 2007 to date has broken $3.6tr (£1.77tr), already beating the 2006 record full-year figure. But the third quarter has seen M&A activity slide by 66 per cent against July 2007 figures on the back of global market jitters. Global deals announced in September 2007 amounted to just $192bn (£94.24bn), the lowest monthly total since August 2005.

The latest Thomson Financial figures show that A&O has continued its impressive growth, with a near fourfold increase in the value of announced European deals to $445.94bn (£218.72bn). On the recent downturn, A&O corporate managing partner Andrew Ballheimer was upbeat. "Personally, I'm not panicking," he said. "We and our peers will be weathering whatever comes.

Clifford Chance and Sullivan came second and third respectively, with the former doubling its 2006 third-quarter deal value to almost $420bn (£205.99bn). Corporate partner David Walker was optimistic on the action in the mid-market, but acknowledged that in the last quarter "deal activity has slowed".

The record figures have been buoyed by a flurry of high-profile M&A activity across the board and in no small part by the ABN Amro saga. A&O has been acting both for ABN in negotiating the dowry with its suitors and for Bank of America on its marriage to ABN's US daughter company LaSalle for more than £10bn. Sullivan and Clifford Chance are both advising Barclays on its £40bn bid for ABN, and Linklaters is advising on the Royal Bank of Scotland-led consortium's £49bn bid.

In worldwide rankings Sullivan comes top, but itself and stalwarts Skadden Arps Slate Meagher & Flom, Linklaters and Davis Polk & Wardwell are joined by global M&A newcomers A&O and Clifford Chance in second and fourth places respectively. Shearman & Sterling has dropped to 15th place from third place on the back of a disappointing year.

Linklaters' corporate head David Barnes was confident in the strength of the firm's corporate client and global network in emerging markets. "We're still busy and seeing an awful lot of work coming in from Asia," he said.

The Asia-Pacific region has seen a massive rise of more than 60 per cent in both announced and completed M&A deals. The US has also seen healthy activity, but the US's contribution to total global deal volumes has dropped by 3 per cent from last year.

Europe's announced M&A figures are on a par with Asia, but with many monster deals still waiting to complete there has been only negligible growth. If firms want to bill these deals by year-end, they had better hope they will wrap up soon.

Any European Involvement Announced (1 Jan-30 Sept 2007)Rank Legal adviser Value ($bn) Value (£bn) Rank (1 Jan- 30 Sept 2006) 1 Allen & Overy 445.94 218.72 13 2 Clifford Chance 420.00 205.99 4 3 Sullivan & Cromwell 363.91 178.48 3 4 Linklaters 362.55 177.82 2 5 Freshfields Bruckhaus Deringer 313.04 153.54 1 6 Skadden Arps Slate Meagher & Flom Skadden Arps Slate Meagher & Flom 142.94 5 7 Uría Menéndez 233.52 114.53 47 8 Slaughter and May 214.79 105.34 21 9 Cleary Gottlieb Steen & Hamilton Cleary Gottlieb Steen & Hamilton 102.32 18 10 Shearman & Sterling 191.17 93.76 8 Any European Involvement Completed (1 Jan-30 Sept 2007)Rank Legal adviser Value ($bn) Value (£bn) Rank (1 Jan- 30 Sept 2006) 1 Freshfields Bruckhaus Deringer 238.85 117.1 3 2 Allen & Overy 184.12 90.3 4 3 Clifford Chance 176.87 86.8 1 4 Sullivan & Cromwell 167.69 82.2 6 5 Linklaters 166.28 81.6 2 6 Latham & Watkins 126.44 62.0 22 7 Slaughter and May 111.95 54.9 7 8 Herbert Smith/Gleiss Lutz/Stibbe Herbert Smith/Gleiss Lutz/Stibbe 51.3 5 9 Cleary Gottlieb Steen & Hamilton Cleary Gottlieb Steen & Hamilton 49.5 9 10 Davis Polk & Wardwell 86.95 42.6 16