M&A: firms with European operations benefited from surge in activity last year

Clifford Chance leapfrogged US rivals Sullivan & Cromwell and Simpson Thacher & Bartlett to take the top slot in the worldwide mergers and acquisitions (M&A) league table for 2005, it has been revealed.


According to data provider Thomson Financial, the Canary Wharf-headquartered firm advised on 444 deals worth a total of $490 billion (£274 billion). Sullivan & Cromwell came second, advising on $484 billion-worth of deals, with Simpson Thacher in third with $469 billion.


Clifford Chance's largest transaction saw it advise Spanish utility company Endesa on its defence against a $51 billion hostile takeover bid by Gas Natural.


Peter Charlton, the firm's global head of corporate, said: 'It has been a busy year for all firms in the M&A market, so we are understandably proud... It is also satisfying to see the consistency of our performance.'


The firm came first by value in a number of European countries, including the UK and Germany, as well as Asia. The one dark spot came in the US, where it fell from ninth place in 2004 to 14th last year.


Also in the top 25 worldwide was Freshfields Bruckhaus Deringer in seventh, swapping places with Linklaters in eighth. Allen & Overy (A&O) meanwhile came 12th, up from 28th, on the back of deals such as Alliance Unichem's £7 billion merger with Boots. Herbert Smith's alliance with Germany's Gleiss Lutz and Benelux firm Stibbe was 22nd.


Richard Cranfield, A&O's global head of corporate, said: 'Last year there were a number of factors behind the revival in M&A. Activity was particularly strong in Europe and we benefited from that as did other firms. We also benefited from having a broad franchise in Europe, the US and Asia - not every European firm has a proper M&A capability in New York [as we do].'


Clifford Chance, Freshfields and Linklaters took the top three spots in Europe, with A&O fifth behind Sullivan & Cromwell.


A number of other US firms made advances in Europe, notably Cleary Gottlieb Steen & Hamilton (sixth, up from 22nd in 2004), Simpson Thacher (eighth, up from 23rd), and White & Case (11th, up from 34th).


However, Mr Cranfield suggested that the progress of US firms has been overstated to an extent, as they often receive credit for deals where they only provided advice on the US law aspects of a transaction.


'That said, we are seeing a lot more of the US firms,' he told the Gazette. 'They are being successful for two reasons: they are investing in English, German and French-qualified lawyers, and several firms have strong relationships with US private equity houses who they have followed into Europe. That's a genuine competitive threat.'


Other UK-based practices to climb the ranks in Europe were Lovells (tenth, up from 29th), Cameron McKenna's CMS network (14th, up from 32nd) and Ashurst (21st, up from 31st).


Nigel Read, a corporate partner at Lovells' London office, said: 'We have been building our European capability and that investment has been coming good. There have also been the usual swings and roundabouts of M&A, with a number of clients becoming more active last year.'


The firm's multi-billion-pound deals in 2005 included SAB Miller's acquisition of South American brewer Bavaria.