King & Wood Mallesons’ year-long merger negotiations with Singaporean firm WongPartnership failed just days before a tie-up was to be announced to the market, The Lawyer can reveal.
Various sources both internally and externally have confirmed that King & Wood Mallesons planned to announce a merger deal with WongPartnership during a week-long annual global partnership conference at the beginning of March. WongPartnership, however, pulled out of the deal just days before the meet.
King & Wood Mallesons purposely chose Singapore’s landmark building Marina Bay Sands as the location for the conference, which was lined up to celebrate the first anniversary of the combination between Mallesons Stephen Jaques and King & Wood.
It is understood that many guests received an invitation from King & Wood Mallesons to attend its celebration reception, stating there would be a “special announcement”, which was widely anticipated as a merger announcement with WongPartnership.
Sources also revealed that both sides felt deeply aggrieved by the eleventh-hour collapse of the proposed merger, which was largely due to the reluctance from a number of WongPartnership partners. A source noted that the main challenge was reaching an agreement on aligning financials.
The leadership teams leading the negotiations were thought to be senior partner Alvin Yeo of WongPartnership and global managing partner Stuart Fuller and Hong Kong partner Larry Kwok from King & Wood Mallesons. Kwok was the managing partner for the firm’s Asia strategy and market until May when he joined the newly created Hong Kong Competition Commission.
King & Wood Mallesons has around 1,390 lawyers, of whom 369 are partners. The combined firm has an estimated revenue of $700m (£457m) in 2012.
WongPartnership is one of the “big four” Singaporean firms and has 265 lawyers including 90 partners. Its turnover is estimated at S$140m (£74m). Had the merger gone through, it would create an enlarged Asia-Pacific regional firm with a total turnover of $812m.
Both King & Wood Mallesons and WongPartnership did not return request for comment.
Australian firm Mallesons Stephen Jaques and Chinese firm King & Wood cames together in December 2011 (15 December 2011), creating a three-partnership Asia-centric international firm.
The combined firm, took effect on 1 March 2012, is structured as a Swiss verein, and comprises of three legally and financially separate partnerships – in Australia, China and Hong Kong.
A source close to the firm cited that in the agreement between the two firms, there is a clause stating that there will be other mergers and the combination between the two is only the first step. The source admits that King & Wood Mallesons is always in discussions with possible parties on a merger, but declined to name the firms.
The Lawyer first revealed the merger talks between King & Wood Mallesons and WongPartnership in June 2012 (18 June 2012). But it was said that even prior to finalising its deal with King & Wood, Mallesons was already keen on plugging the practice gap in Singapore and was confident that WongPartnership could be brought into the fold.
In Canada, there has been speculations that King & Wood Mallesons is in merger discussions with Gowlings Lafleur Henderson. However, a week ago the Canadian firm’s chair and CEO Scott Jollife told Canadian business newspaper Financial Post that “any suggestion that we have merger plans with KWM or anyone else is absolutely false”.
Other possible merger candidates for King & Wood Mallesons include UK firm SJ Berwin. The two firms have already held talks over a deal (12 November 2012) and most recently, SJ Berwin sent a delegation of senior figures to Australia in February to negotiate further with King & Wood Mallesons (20 February 2013).
For an insightful look at King & Wood and Mallesons’ combination, please see feature The King and Oz (2 July 2012).