Commentary: What lies beneath CC's corporate league table rankings
CC's corporate practice is certainly global, but is it ready to compete with the world's best firms? On the surface, Clifford Chance's (CC's) corporate practice looks normal. The firm might be inflated in some league tables because of bank roles and sheer mass but otherwise, it gets its fair share of top-tier M&A.
February 28, 2007 at 10:33 PM
4 minute read
CC's corporate practice is certainly global, but is it ready to compete with the world's best firms?
On the surface, Clifford Chance's (CC's) corporate practice looks normal. The firm might be inflated in some league tables because of bank roles and sheer mass but otherwise, it gets its fair share of top-tier M&A.
But when it is broken down in detail, a more peculiar picture emerges. For example – have a guess which office generates the highest overall value of M&A deals. London? Germany? Actually, it is North America.
The firm's M&A team in the US and Canada has contributed 19.9% of CC's total corporate activity by value over the past three years, according to data from Mergermarket. This is slightly ahead of the 19.2% generated by the UK, while France and Iberia each contributed 10.2%.
By volume, the US is third, behind the UK then Germany. This means that the average deal size for the firm in the US – which is estimated to stand at A1.78bn (£1.2bn) – is substantially higher than elsewhere. In the UK, the average deal size is just under A1bn (£673m), while in Germany it is A500m (£336m).
In the past year, the 10-partner US M&A team has worked on deals including advising American Power Conversion on its $6.1bn (£3.2bn) takeover by Schneider Electric and on the $2.1bn (£1.1bn) acquisition of all of Enron's foreign-based energy assets.
Given the firm's well-publicised struggles in the US due to the long-running fall-out from the Rogers & Wells merger, this appears something of an untold success story, even if value statistics will always be a rough guide.
Or is it that the UK should be doing better? The London corporate team represents 40% of the department's overall lawyers. But while CC's position as Europe's premier buy-out operation remains unquestioned, it is still difficult to name many of the firm's FTSE 100 clients after British Energy and Aviva.
Likewise, all the firm's top 10 deals since the beginning of 2004 – the biggest being advising Endesa on its A60bn (£40bn) offer from E.ON and advising Aventis on Sanofi's A57.7bn (£38.8bn) approach – have been in continental Europe, not the UK.
Not too FTSE-focused
CC rebuffs such claims, arguing that the firm has never obsessed about its FTSE 100 relationships, preferring instead to focus more broadly on sponsors, banks and international companies. It also points to the fact that it has advised banks and unsuccessful bidders on some of the biggest recent UK deals.
London-based partners have also been the firm's most active deal-doers in the past three years. David Walker, David Pearson and Simon Tinkler have advised on the most deals, although many of these seem to have been in the upper mid-market bracket.
Indeed, CC does seem to have been more focused on upper mid-market work domestically than you would expect for a firm of its size. Globally, the firm's volume of M&A deals rose from 318 to 335 in 2006, but the total value of deals stayed static at just under A280bn (£188bn).
This means the firm's average deal size dropped slightly from A870m (£585m) in 2005 to A832m (£560m) in 2006.
Legal Week's lead adviser league for Europe's largest M&A deals in 2006 found the firm still a way behind Freshfields Bruckhaus Deringer and Linklaters. Nevertheless, the firm was a convincing third place on lead corporate work, taking lead roles on 29 of Europe's largest 200 deals with a combined value of £108bn.
The firm has established a credible £280m turnover department – of which nearly £100m in fees is private equity-related – that is well spread across the US, UK, Europe and Asia. How very global.
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