The transatlantic merger talks between New York’s Chadbourne & Parke and London’s Watson Farley & Williams have collapsed, after nearly 12 months of debate.
The firms announced the news today (14 November). Talks had begun in January and would have created a legal practice with a combined turnover of nearly £200m.
The news follows reports by Legal Week earlier this month that the merger bid had hit delays – an issue that caused frustration among some Watson Farley partners.
It is understood questions had been raised about the US firm’s willingness to do the deal after talks, which were led by Watson Farley managing partner Michael Greville and Chadbourne managing partner Charles O’Neill, slowed during the summer months.
Chadbourne refused to comment on claims that the name of the merged entity, the make up of the management and the remuneration structure to be employed were likely to have been points of hot debate.
In a statement, Chadbourne’s O'Neill commented: “The business case for a merger was strong and Watson Farley is an outstanding firm. Unfortunately, we were not able to reach agreement.”
The statement continues: “Expanding our presence in London remains a key strategic objective for the firm.”
One main driver behind the talks was both firms’ focus on project finance and the energy sector. Chadbourne acts for a number of major energy companies including Gazprom, Rosneft and Gulfstream Natural Resources, while Watson Farley’s energy practice acts for clients such as Edison Renewables and Falck Renewables.
However, during the negotiations, Watson Farley lost two of its senior litigation partners and a projects partner. International litigation head David Kavanagh and fellow contentious partner David Foster left to join O’Melveny & Myers, while Susan Farmer joined Fulbright & Jaworksi’s City energy and project finance team.
The head of one top 20 firm commented: Sometimes if you can't do a merger quickly it's not worth looking at doing at all.”
Watson Farley is no stranger to failed merger talks. In 2002 the firm held merger discussion with fellow City firm Simmons & Simmons, although they were ultimately unsuccessful. The UK top 50 firm has also come close to securing transatlantic tie-ups with US practices including Hunton & Williams and Squire Sanders & Dempsey in recent years.
One ex-Watson Farley partner told Legal Week: “I don’t think Watson Farley has a 'plan B' so for the people in the firm who needed a bigger platform for their practice this could be a significant setback. From the firm’s perspective there was a lot riding on it and it will be interesting to see what happens now. Once the talks started getting delayed by two or three months, you knew it would only be a matter of time [until they failed].”
In a statement, Watson Farley’s Greville echoed O'Neill’s words, saying: "There was a good business case for the merger and Chadbourne & Parke is an excellent firm. Unfortunately, we were not able to reach agreement."
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