Mergers and the mid-market

International and domestic mergers are high on the mid-market agenda

Last week Addleshaw Goddard and Nabarro confirmed they had called off merger talks, which means one thing – neither can deny that they are now officially in play.

A source close to the talks said Addleshaws had called the whole thing off, although it is not yet clear why. Meanwhile, a source close to Nabarro says mergers have been an on-off topic of discussion at the firm for at least 10 years. He adds that in recent times Nabarro’s partnership has been generally more in favour of a US merger than a domestic one.

No names were mentioned, but partners understand the most likely suitor would be a national US firm – as opposed to a New York or white shoe firm – located on the eastern seaboard.

Similarly, one former Addleshaws partner says they would not be surprised if members were more in favour of an international merger, given that a domestic one is likely to lead to overlap and thus “a bloodbath”.

Of course, that Addleshaws and Nabarro were exploring a merger should surprise no one. Practically every firm in their bracket is looking for merger partners.

As one former law firm manager says: “Almost every firm in the £70m-£120m bracket will be saying ‘how do we get bigger?’, pushing their position in the UK, but also looking to expand their international war chest.”

Field Fisher Waterhouse (FFW) and Osborne Clarke (OC) were also planning to merge until talks failed. The impression is that OC won’t try it again – this year, anyway. Likewise, FFW says it is now focusing on itself.

Lawrence Graham is a perennial subject of merger rumours and few would be surprised if it completed something in 2013. Although Eversheds and CMS are way above the £70-£120m bracket, both are known to be discussing tie-ups, domestic and international.

Likewise, Ashurst’s and Simmons & Simmons’ long-term plans include US mergers, but it would be surprising if either got something done in 2013.

Those looking for an instant add-on, however, could do worse than look to Scotland.