Olswang is on the brink of a “transformational” three-way merger with Nabarro and a mystery third firm, The Lawyer understands.
The tie-up is expected to be announced to the three partnerships on Friday (30 September).
Mystery has surrounded Olswang’s merger plans over the summer, with a number of firms including CMS Cameron McKenna, Addleshaw Goddard, Dentons, Greenberg Traurig and Virginia-headquartered Hunton & Williams named as potential suitors.
A market source said the three-way merger included one of the “largest firms in the world by headcount”, lending credence to the involvement of CMS or Dentons.
CMS has more than 4,750 staff, while Dentons is known as the largest law firm in the world with approximately 7,300 lawyers.
Addleshaw Goddard is largely considered to be out of the running, and partners at that firm confirmed management has not put forward proposals for a vote on a merger.
The third mystery firm is thought to be one of CMS, Dentons or Hunton & Williams, although sources said the parties had “played the mergers talks ridiculously close”, with Olswang CEO Paul Stevens involving solely his inner circle in the planning.
The combination is expected to create a “unique platform” and be “structurally unusual”, according to sources close to the firm. Speculation is rife the triumvirate is considering its options to abandon its LLP structure in favour of an ABS-style set-up.
Olswang has remained tight-lipped about its merger partners, although news leaked last month the TMT firm was exploring its options for a three-way merger having originally been in the market to be taken over.
The firm first approached Simmons & Simmons and Bird & Bird abouttraditional merger plans at the start of this year but changed tack when discussions were stonewalled.
Insiders framed the three-way merger as the “best possible result” for Olswang, which has seen two years of upheaval and partner exits.
“It’s a clever move because a takeover by one firm would have been seen as Olswang admitting defeat,” said a source.
A series of Nabarro partners declined to comment on the plans.
The two firms are relatively similar financially, with Nabarro edging ahead posting £130m in revenue to Olswang’s £112m last year. Nabarro’s average profit per equity partner (PEP) stands at £586,000, while Olswang’s is £490,000.
Nabarro has been in the market for a UK merger for a while, having previously tried to secure a merger with Addleshaws three years ago. Its large pensions deficit was understood to have put the kibosh on the plan;however it emerged earlier this year Nabarro has implemented a plan to bring down the deficit.
Rumours also surfaced earlier this year that Addleshaws and CMS had held early stage merger talks, which fell through.
CMS then turned its attention to Olswang; however sources close to both firms said the larger firm had taken its deal off the table late this summer.