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

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By Thomas Connelly on

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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