NEGOTIATIONS OFF: City firm says transatlantic link-up is off the agenda for time being

The merger between City firm Ashurst Morris Crisp and New York firm Fried Frank Harris Shriver & Jacobson - touted as the first transatlantic merger of equals - foundered this week after lengthy negotiations, latterly bedevilled by complications over how to merge the firms' structure and management.


A joint statement from the firms said a mutual decision to discontinue negotiations for merger arose because of 'too many uncertainties in the path of completing a combination of two partnerships of substantial size and histories'.


The statement said the merger had been an 'opportunity and not a need' for both firms, which said they would focus on maintaining organic growth, although they would continue to work together and remained 'on excellent terms'.


But the failure is likely to raise doubts about possible further attempts at such mergers of equals.


Reports of difficulties with the 'Ashurst Fried Frank' negotiations focused on the problem of Ashursts appointing 'super point' partners - an equity elite of a few partners - to tally with Fried Frank's structure, and the tax implications of the merged firm having a UK-based limited liability partnership (LLP), and a separate US LLP.


Ashursts and Fried Frank declined to comment on the details of the negotiations.


A senior partnership lawyer in the City, who preferred not to be named, said the LLP issue 'could easily have been overcome', saying: 'Partnership profit share and governance are usually the big issues.'


He blamed timing for the merger's failure, adding: 'Everyone in professional mergers said it took too long. Eight or nine months is just too long. Imagine spending that amount of time having to think about getting married. One of you is going to get hacked off.'


This is the third unsuccessful merger negotiation for Ashursts, following unproductive talks with Clifford Chance in 1998, and US firm Latham & Watkins in 2001.


Ashursts managing partner Justin Spendlove said: 'A transatlantic merger is clearly off the agenda for the foreseeable future, and we will focus on our market-leading positions in Europe, coupled with excellent collaborative agreements in the US.'