Baker & McKenzie's Germany arm has ditched its standalone private equity practice in a surprise move that brings the highly regarded group back into its general M&A team.

The practice was integrated into the main corporate team earlier this year following the relocation of Munich-based partner Walter Henle to the US giant's Frankfurt arm.

Subsequently, Bakers transferred M&A partner Bernd Mayer from its Duesseldorf arm to head up the new combined M&A/private equity group in Munich.

Former private equity head Henle, who in 1979 launched Bakers' branch in Munich – Germany's traditional centre for venture capital firms – said that his move to Frankfurt was to "bolster its private equity capacity" in the city.

"The Frankfurt market has interesting opportunities and great market potential for the firm," Henle added.

Mayer told Legal Week: "The firm had the old structure in place for several years – but lawyers close deals on both sides and it is unnatural to separate them. Everyone agreed that the right approach now was to merge them to create a stronger group."

However, the shake-up has been met with surprise by rivals, in particular the decision to transfer Henle, one of Munich's best-known corporate lawyers, to the culturally distinct Frankfurt legal market.

Bakers has also had to contend with predatory raids on its private equity team, with Freshfields Bruckhaus Deringer and SJ Berwin recruiting senior staff in recent years.

One partner at a rival US firm in Germany said: "The change is a bit surprising. That Bakers is not putting up the banner of having a focused private equity practice is against the trend of most German firms."

The shake-up comes in the wake of Milbank Tweed Hadley & McCloy's market-shaking raid on Freshfields Bruckhaus Deringer's highly-rated Munich-based private equity team, which saw the New York giant take the firm's global private equity co-head, Peter Nussbaum, and two other partners.