While Freshfields surges up the M&A rankings post-Bruckhaus, Saira Zaki still finds chinks in the armour – notably in Continental Europe
First half M&A figures must have been manna from heaven for Freshfields Bruckhaus Deringer’s 135 global corporate partners.
Having been denied the expected post-Bruckhaus spell in the limelight by a merger-weary legal market, the firm’s strong showing in the global and European M&A tables is a welcome reminder of the combined strength of the firms.
Of its UK rivals Freshfields just topped Thomson Financial’s global M&A H1 tables, advising on 114 deals valued at £86bn, surpassing Skadden Arps Slate Meagher & Flom and Linklaters & Alliance along the way.
And it was in Germany
that the firm looked most impressive, taking on lead roles on three of the most prestigious deals around: Dresdner Bank’s ground-breaking bid for insurance group Allianz, Bertelsmann’s £2.6bn share swap with Groupe Bruxelles Lambert and Powergen’s merger with E.ON.
True, years of close co-operation between Freshfields and Bruckhaus – shared clients already included names such as Dresdner, Hewlett Packard and Mannesmann – means that the merger is bringing more in the way of fees than new business, but competitors are beginning to notice the sheer market share.
City-driven deals have also been plentiful. Highlights include Compass Group’s £3.26bn disposal of the Granada hospitality business, Brambles Industries’ £5.4bn merger with GKN’s support services activities and Schlumberger’s £3.6bn acquisition of Sema.
Despite its strong corporate client base the firm remains heavily positioned in the financial services sector with CSFB and Deutsche Bank still some of its most active clients (see table). Already this year the firm has advised on 10 deals in financial services worth £35bn. Royal Bank of Scotland, which has just called in its magic circle adviser on last week’s £2bn share offering, likewise remains a key client.
Freshfields will also have been pleased to have bagged the upcoming flotation of the London Stock Exchange, edging out existing adviser Herbert Smith.
The firm was also strong in the telecoms (carriers and hardware) and media sectors, headed by partner Simon Marchant.
Although a top five sector for the firm last year, automotive, headed by Yves Huyche de Mahenge, has not performed as well this year for Freshfields as it did last year when the firm advised on 10 deals worth £24bn compared with just one deal, worth £235m, this year.
A sector where the firm has gained some ground through consolidation, however, is leisure. Last year Freshfields advised on nine deals worth £3bn. In the first half of this year it has advised on nine deals worth £5bn.
But London and Germany aside, Continental Europe remains an issue for the firm, in which it is still lagging behind Linklaters and Clifford Chance, a fact underlined in the country specific deal tables, in most key jurisdictions.
Global head of practice Barry O’Brien says: “I predict we will strengthen our position in France, Italy, Spain and the Netherlands.” However he adds: “There is no need for us to merge.”
This year progress on the hiring front has been slow with the last significant arrivals being dispute resolution and tax partners Elie Kleiman and Antoine Colonna d’Istria, who joined the Paris office last year.
Indeed, the most significant hire this year, unusually, was in London where Freshfields lured Denton Wilde Sapte star David Aitman to reinforce the firm’s core European competition practice.
Despite the recent hire of Ken Martin from Goldman Sachs to London, O’Brien is also ready to admit that the firm must focus on building up its securities practice across Europe, one of the few areas in which the firm has struggled.
Last year Freshfields was hit by a number of senior associate departures from the US group for a variety of reasons. “There is some work to do in terms of growing the network,” O’Brien concedes.
Other areas requiring fine-tuning include the firm’s London-based private equity practice, whose clients include Cinven, Warburg Pincus and Nomura Principal Finance – an area that Freshfields wins hands down against Linklaters, which has still failed to secure or identify credible private equity partners in London.
“It is just a case of us giving private equity a greater focus so it is not just an indistinguishable part of corporate,” O’Brien says.
