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A&O-O’Melveny mega-merger scuppered by plummeting pound, former magic circle managing partner reveals

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Andrew Ballheimer was told bad news while holidaying in Spain

Long-running merger talks between Allen & Overy and US outfit O’Melveny & Myers collapsed last year when the dollar rose sharply against the pound, the magic circle player’s former managing partner has revealed.

Andrew Ballheimer, who stepped down from the top role in April, has shed light on the highly-publicised transatlantic mega-merger that never was. “By summer 2019, partners were on board and the deal was on the brink of going ahead,” the FT reports in an interview with Ballheimer over the weekend. “But at the last moment, sterling moved sharply against the dollar, throwing the merger into disarray.”

Legal Cheek reported back in September 2019 that discussions between the two firms had ended without a deal being reached. At the time, A&O said that while there were some “compelling synergies” between it and its Los Angeles-based counterpart, it had “mutually decided not to continue these discussions”.

Reflecting on the tie-up talks eight months on, Ballheimer told the newspaper:

“We ultimately reached agreement on all [the] issues but then FX and interest rates moved against the deal… The strengthening of the dollar against the pound impacted valuation and interest rate cuts in the US affected pension costs on their side. That meant that we couldn’t agree a financial deal that both sides could support.”

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To make matters worse, the top lawyer discovered the deal was dead in the water while on holiday in Spain with his family. He continued:

“Wim [Wim Dejonghe, A&O’s senior partner] called me as I was having a cup of tea on our terrace and said, ‘This doesn’t look good, does it?’ and I said, ‘No, I think it’s over.”

Ballheimer would have secured himself at least a further three years in the top role if the deal had gone through, according to the report, but will soon leave to “advise companies coping with crisis situations”.

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12 Comments

Jez

Brothers! Sisters!

Jeremy Corbyn’s successors will implement changes to transition to the NEW NORMAL!

Property taxes, taxes on driving, and an end to flying for good!

We are in the green new deal era! Solidarity with Palestinians! Free movement for Muslims!

VOTE LABOUR

FOR THE MANY, NOT THE FEW!!!

(1)(31)

Anonymous

Pls, fuck off.

Sincerely,
Everyone

(31)(1)

Bored

Legal Cheek, would you just start deleting comments from this idiot, please. He ceased to be funny years ago.

(4)(0)

tips@legalcheek.com

I have a theory that all the Jez comments are written by Tom to show LC commenters that the retention rate articles are not the worst thing that can happen to them.

(9)(0)

Anonymous

Why does my breath smell so bad ? Brushed my teeth five times now and still stinks – any thoughts ?

(5)(1)

Anon

Brexit. The gift that keeps taking.

(5)(1)

Former Mayor of Sussex

Uhhh can someone explain to us non-financially savvy folk what this actually means? “Interest rate cuts in the US affected pension costs on their side.” translation please? How does an interest cut affect pension costs?

(0)(1)

bloggeramg

When interest rates go down, the value of an annuity goes up. For example, if I want to pay you $100 a year from now and interest rates are 10%, it will only cost me about $91 now. But if interest rates are 0, then it will cost me $100 now. By the way, I am a former O’melveny attorney who wrote a website about their atrocious lack of ethics and I post it to inform others. Allen & Overy dodged a bullet. https://www.omelvenymyersethics.org

(18)(1)

Anonymous

Read it. Was not a very convincing list. All standard stuff at the time.

(0)(2)

Anonymous

Former Mayor, if you are that basic may I suggest you focus on criminal law?

(0)(1)

Anon

Oh, piss off back to your virtual lectures and failed vac scheme applications. Maybe Shoosmiths or Weightmans will finally look at your application this round.

(0)(0)

Dr Robert Sharpe (A&O's Consultant Psychologist 1989-2014)

Why on Earth were A&O even breathing the same air as these people? Do they not have a top psychologist advising them on what company to keep and be judged by, assuming they couldn’t manage that themselves?

(3)(0)

Comments are closed.

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