CMS, Nabarro and Olswang vote in favour of three-way merger under CMS brand

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The partners of CMS UK, Nabarro and Olswang have voted in favour of a three-way merger, with the new firm to be known as CMS.

The merger is due to go live on 1 May 2017, with Nabarro and Olswang to join the CMS UK LLP. The UK LLP will be named CMS Cameron McKenna Nabarro Olswang LLP.

The deal will create a firm with nearly 2,500 lawyers in the UK, within a global total of more than 4,500 lawyers across 65 offices in 36 countries, with combined UK revenues of around £450m and global revenues of more than €1.2bn.

The merged firm will focus on six sectors – energy; financial services; infrastructure and projects; life sciences and healthcare; real estate; and technology, media and telecoms.

Legal Week revealed last week (7 October) that Olswang partners had been given until today (10 October) to decide whether to commit to the proposed merger, asking them to sign a lock-in agreement committing them to the tie-up.

CMS UK senior partner Penelope Warne commented: ”We are delivering the next step to transform the legal services industry. Through this combination, we are delivering a modern firm that combines scale with an exceptional depth of sector expertise. The merger will also have considerable significance for the global growth plans of CMS and is a great endorsement of the extraordinary export of English law throughout the world.”

Nabarro managing partner Andrew Inkester added: “This is a UK legal merger that makes sense. It creates a firm that is more than the sum of its parts, bringing together our expertise in six strategic sectors. Our international scale and ambition will deliver a global sector law firm to meet the future needs of clients and inspire our people. Our combined talent and economies of scale will also deliver the resources we need to invest in new technologies and transform the way we deliver legal services.”

It is understood that partners in Olswang’s Paris and Munich offices have been considering alternatives to the merger, given CMS’s unconventional international structure, which operates as a European Economic Interest Grouping of member firms.

The UK LLP – which Olswang and Nabarro will become a part of – comprises CMS Cameron McKenna and 12 other offices in Bulgaria, Brazil, China, Czech Republic, Hungary, Mexico, Poland, Romania, Russia, Turkey, Ukraine and the United Arab Emirates

However, it is not financially integrated with CMS’s other European arms, including CMS Bureau Francis Lefebvre in France and CMS Hasche Sigle in Germany.

News of the proposed merger was announced by the firms on 30 September, after partners at all three firms took part in a conference call. Olswang was known to have 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.

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.

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 very 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.