SNR Denton and Salans prepare to seal three-way deal with Canada’s FMC

Salans and SNR Denton are set to vote at the end of this month on a three-way merger with Canadian firm Fraser Milner Casgrain (FMC).

Elliott Portnoy
Elliott Portnoy

The non-profit sharing merger, effectively a four-way combination given SNR Denton’s structure as two LLPs, is set to take the form of a Swiss Verein and will go live at the start of 2013 if the respective partnerships approve the deal.

The tie-up will see separate LLPs in the US, the UK, continental Europe and Canada, with the continental Europe arm effectively the successor of the current Salans partnership.

Salans will cease to exist in London, where its office will be consumed by the UK arm of SNR Denton, while its small New York base will become part of SNR Denton’s US LLP. It is unclear what will happen to SNR Denton’s base in Paris, where Salans has a stronger footprint.

The deal includes the option for a vote on a full financial merger of the four arms in future years, but this is not a guaranteed next step.

SNR Denton global CEO Elliott Portnoy is being tipped to run the overall group, while senior Salans figures such as global managing partner Dariusz Oleszczuk and New York-based global board chairman François Chateau are expected to take positions on a senior management committee.

It is currently unconfirmed what names the separate arms will take, but it is understood that the Salans brand will be kept in some capacity given its recognition levels in Central and Eastern Europe. Sources suggested that the FMC name is also likely to be retained in some way.

A Salans spokesperson said in a statement: “Salans is always interested and open minded about ways to expand access to markets and services for our largely multi-national clients. Our policy is not to comment on specifics, but in principle strategic growth opportunities are welcome.”

FMC and SNR Denton were unavailable for comment.

The vote later this month follows nearly a year of talks between SNR Denton and Salans, with deal documents only being circulated to Salans partners in the past couple of weeks. The delays – including to a vote originally scheduled for September (22 August 2012) – come as a result of protracted negotiations over FMC’s involvement, a late addition to the deal.

The Lawyer exclusively revealed that Salans and SNR Denton were in merger talks in February (14 February 2012).

Meanwhile, there is discontent among some Salans partners over the cost of the deal and the benefits of the strategy of merging under an alliance of firms that are not sharing profits.

A source close to the firm commented: “There’s concern at the cost of the strategy going forward and whether there really will be the strategic benefit going forward.”

A Swiss Verein, also used by Baker & McKenzie, DLA Piper and Norton Rose, keeps different geographical arms of the firm separate for liability and regulatory purposes.

The merger comes amid a spate of Canadian deals, including Norton Rose’s merger earlier this year with Macleod Dixon, its second tie-up in the country (4 October 2011). The Lawyer tipped FMC as a potential merger partner for a US firm earlier this year (30 July 2012). Sources at the time linked it with Houston firm Fulbright & Jaworski.

Clyde & Co also merged with Canadian firm Nicholl Paskell-Mede last year (27 June 2011).