CMS, Nabarro and Olswang on verge of three-way tie-up

Olswang

CMS, Olswang and Nabarro are weighing up a three-way deal that could create a firm with revenues of almost £1bn.

Partners close to the three firms confirmed discussions to Legal Week, with Olswang partners understood to be meeting tomorrow to vote on a deal (30 September).

Olswang has been in the market for a merger for some time, with news of its talks about a combination with CMS UK breaking during the summer. The firm is first understood to have approached CMS about a potential merger in 2014 under former CEO David Stewart and has since been linked with numerous firms.

The firm has been divided by its attempts to internationalise and has seen numerous partner exits in recent years. It has also seen speculation of a breakup rather than a merger, with one former Olswang partner suggesting it could be split up, with some practices going to Nabarro, others to CMS and the firm’s original media core spinning off into an independent boutique.

CMS posted an 8.4% increase in global revenue for 2015, up to €1.01bn (£735.3m), while Nabarro saw turnover rise 3.5% to £130.4m. In contrast, Olswang saw revenue fall 10.8% to £113m after a difficult few years.

CMS, Olswang and Nabarro posted profit per equity partner of £443,000, £490,000 and £586,000 respectively in 2015-16.

Three-way mergers are rare in the legal world, with notable examples including the 2013 combination of SNR Denton, Salans and Fraser Milner Casgrain, which created Dentons; Norton Rose’s 2011 tie-up with Canada’s Ogilvy Renault and South Africa’s Deneys Reitz; and the 2005 merger of DLA with US firms Piper Rudnick and Gray Cary Ware & Freidenrich, which formed DLA Piper.

Nabarro held merger talks with Addleshaw Goddard in 2013, a deal that would have created a combined firm with revenues of more than £280m.