A merger tie-up between ‘magic circle’ firm Allen & Overy and US-based global giant Shearman & Sterling will create a unique legal practice, the parties have said.

Shearman & Sterling will join Allen & Overy in a $3.4bn firm named Allen Overy Shearman Sterling, with 3,900 lawyers and 800 partners across 49 offices worldwide.

Allen Overy Shearman will be the only global firm with US law, English law and local law capabilities in equal measure, the announcement stated.

“This merger is driven by clients’ needs for a seamless global offering of the highest quality and depth to support them in navigating an increasingly complex legal, regulatory, and geopolitical environment,” it added.

Expanded area

Shearman & Sterling will gain access to a dramatically expanded rest-of-the-world offering across practice areas, while Allen & Overy will benefit from increased board-level recognition and expanded access to a corporate client base in the US, the announcement states.

The news follows the decision in March this year to call off a proposed merger between Shearman & Sterling and Hogan Lovells after weeks of talks, the England and Wales Gazette has reported.

That tie-up would have created a $3.6bn practice. Allen & Overy's previous attempt at a transatlantic merger, with US firm O’Melveny & Myers, was called off in 2019.