Two Canadian mergers in the space of a year says a lot about a firm’s plans for North America.
Norton Rose’s combination with Calgary-based Macleod Dixon goes live on 1 January 2012, just six months after the UK firm completed another merger with Montreal-headquartered Ogilvy Renault.
The deal sees Norton Rose OR, as the Canadian operations have been called since the June merger with Ogilvy, take on the name Norton Rose Canada, echoing Norton Rose Australia and Norton Rose South Africa.
The name may be changing, but the financial system remains the same: although the Canadian operations are being merged into an integrated entity with a single profit pool, Norton Rose Canada remains a financially independent arm of the Norton Rose network, in the same vein as the South African and Australian businesses.
Macleod has its largest office in Calgary, Canada’s oil and gas hub. This gives Norton Rose the opportunity to capitalise on the sizeable market for junior oil and gas companies with market capitalisations below C$500m (£310m). Work for these clients can yield better fees than those from energy multinationals, which have cut costs by bulking up their in-house teams.
And while Macleod’s second Canadian office is in the finance capital Toronto, Montreal-based Ogilvy, despite having more offices on Canadian soil, has a relatively weak Toronto and Calgary offering and is seen locally as having lost its top-tier position.
While Montreal was once the obvious location for corporates to house their headquarters, it is now a declining market based around older companies. Since the 1980s it has been overtaken by Toronto, the finance hub, as businesses follow the pull of the Toronto Stock Exchange and the Canadian National Stock Exchange, Canada’s answer to AIM.
This is especially so for mining companies, many of which are based in Toronto. However, Ogilvy’s Toronto mining practice is not considered its strongest asset and its Montreal centre of gravity is in a city declining in importance for the corporate world. Sources close to Norton Rose see the Macleod merger as a far better deal than the Ogilvy tie-up.
However, Peter Martyr, group chief executive at Norton Rose, says: “Ogilvy Renault is a dominant player in Quebec and now has a bigger operation in Toronto. Additional business areas in Calgary were being developed, but this merger gets us there in one go.”
The deal gives Norton Rose offices in Venezuela, Colombia and Kazakhstan as well as a Moscow team to complement the firm’s existing one. The Moscow offerings will merge into a single operation and move into one office.
Caracas is Macleod’s largest base in Latin America, with the office’s corporate head Elisabeth Eljuri, an oil and gas specialist, gaining particular praise from the market.
Meanwhile, experts question the opportunities in Kazakhstan – an energy hub, but one with a market well-populated with international law firms.
“We were preparing to enter and have significant business there,” says Martyr. “This office will grow.”
“Norton Rose is trying to play catch-up,” says an observer, adding that the firm is aiming to place as many “flags” in as many jurisdictions as possible around the world. This perception is widely held, as is the view that Martyr and his team are dressing the bride for a US merger on the best possible terms. Martyr, however, denies that there are any talks with touted suitor Fulbright & Jaworski.