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Herbert Smith has scored another multi-billion pound instruction from prize client Bank of Scotland, advising on its £28bn merger bid contract with UK mortgage giant Halifax.But this time the firm will be praying that the deal comes to fruition after advising it on two previous failed merger attempts – one for NatWest in 1999 and the other for Abbey National, a deal which crumbled in February after Lloyds TSB launched a counter bid. Partner Michael Walter is leading the deal from Herbert Smith, details of which were leaked to the press last Wednesday (25 April). The deal is evidence of continued consolidation in the financial services industry despite the slowdown in M&A.If the deal goes ahead Herbert Smith will be vying for top spot as principal corporate adviser to what would become the UK’s fifth largest bank, against Linklaters & Alliance, long-standing adviser to Halifax.The win will be all the more important to the firm as it is still recovering from losing the role of principal adviser to trophy client London Stock Exchange a few months ago to Freshfields.But Linklaters will also be competing fiercely for the job. It has already lost a large chunk of corporate work fromNatWest to Freshfields after the Royal Bank of Scotland deal was completed last year. This year the firm was also excluded from advising its long-standing client Lloyds TSB on its offer for Abbey due to a conflict. Although the deal has been mooted as a merger of equals, Halifax is the larger of the two banks putting Linklaters in pole position. Choosing legal advisers is just one obstacle, however, as the banks have yet to decide where the headquarters will be based. Meanwhile, the deal will also mean the amalgamation of the two banks’ in-house legal teams numbering approximately 90 lawyers. The job of general counsel will be fought between Alastair Loudon from Bank of Scotland and Harry Baines, company secretary of Halifax. The new bank would have a market capitalisation of around £28bn and 1,259 branches. It would have around 61,384 staff and annual pre-tax profits of about £2.63bn.

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