With the acquisition finance market slowing after a hectic 2006, leading finance partners are more eager than ever to position themselves with the select band of sponsors and arranging banks still getting deals to market.

Recent months have seen established teams such as Clifford Chance (CC), Allen & Overy (A&O) and Ashurst tighten their grip on the market with the trio signing a string of a multibillion-pound deals (see below), despite the recent struggle of sponsors to secure acquisitions in Europe.

Key mandates include the A4bn (£2.7bn) acquisition of Linde's forklift truck division, Kion, one of Europe's largest leveraged buy-outs.

CC advised the arranging banks, while Freshfields Bruckhaus Deringer finance partners Frank Laudenklos and Konrad Schott advised sponsors Kohlberg Kravis Roberts & Co and Goldman Sachs.

With CC acknowledged to be on "sparkling form" in the words of one rival, A&O is also seen as having kicked off 2007 in more confident mood after an unsettled 2006.

Headline deals for A&O include advising arrangers HSBC, SE-Banken and Morgan Stanley on the A2.85bn (£1.91bn) acquisition of Swedish medical products company Molnlycke Health Care Group from Apax Partners.

A&O has also just closed a debt role for French private equity giant PAI Partners on its A2.4bn (£1.6bn) acquisition of Lafarge Roofing.

Ashurst has also been active for sponsors, last month advising Charterhouse on the acquisition of Vivarte from PAI for a sum believed to be in excess of A3bn (£2bn). The firm also advised Apollo Management on the financing of the $4bn (£2bn) acquisition of General Electric's industrial materials business.

Despite the slowing pace of acquisitions, intense competition among debt providers and the ready flow of cheap debt is allowing sponsors to push for better terms, including longer interest holidays and improved flexibility to draw down funds.

Herbert Smith finance partner Malcolm Hitching commented: "Some banks are being asked to no longer even rely on interim funding documents but rather on detailed terms sheets against which borrowers can draw down funds. This is far from ideal for banks, but the speed with which deals are being turned around means that people are resorting to these measures."

Aside from the traditionally strong debt teams, this year has seen Kirkland & Ellis' London arm make a splash after advising key client Bain Capital on its $3.5bn (£1.7bn) acquisition of African retailer Edgars Consolidated Stores, fielding a finance team under partner Stephen Gillespie.

Recent activity from US houses such as Bain and Apollo has also led to renewed predictions that high-yield finance is set to gain greater favour in the European market.

Gillespie told Legal Week: "It would be premature to say that this marks the death of permanent senior debt, but current liquidity and the convergence between bank and bond investor bases gives sponsors a greater degree of choice than in the past."

The uneven market is also regarded as having divided firms' fortunes, with mid-market practices seeing a slowdown from last year's activity levels.

But while advisers concede the flow of primary deals has slowed, the vogue for refinancing as borrowers move to lock in cheap debt, is keeping lawyers busy.

A&O leveraged finance head Tim Polglase commented: "In addition to the transactions that are hitting the press, there are a vast amount of very high-value re-financings going on under the radar."

Looking ahead, advisers predict that Central and Eastern Europe, as well as Western Europe – in particular France, Germany and Spain – will be busy.

White & Case finance partner Mike Goetz commented: "You are not going to see big deals out of the emerging markets yet, as people will start to develop the legal framework and dip their toes in."

Leveraged finance – key recent deals

Clifford Chance (CC) finance partner Alan Inglis advised on debt on the A4bn (£2.7bn) acquisition of Linde's division Kion. Freshfields Bruckhaus Deringer advised the sponsors, Kohlberg Kravis Roberts & Co and Goldman Sachs.

Ashurst advised Apollo Management on the financing of the $4bn (£2bn) acquisition of General Electric's industrial materials business. Cravath Swaine & Moore and CC advised the lenders.

Allen & Overy (A&O) partner David Campbell advised debt providers HSBC, SE-Banken and Morgan Stanley on Morgan Stanley and AB Investor's A2.85bn (£1.91bn) acquisition of Swedish medical products company Molnlycke Health Care Group from Apax.

CC partner James Johnson advised on the A2.9bn (£1.9bn) of senior secured facilities provided to the Nycomed Group to finance the acquisition of Altana Pharma.

Kirkland & Ellis finance partner Stephen Gillespie advised Bain Capital on its $3.5bn (£1.7bn) acquisition of African retailer Edgars Consolidated Stores.

A&O finance partner Robin Harvey advised PAI Partners on the finance supporting its A2.4bn (£1.6bn) acquisition of Lafarge Roofing.

Ashurst advised Charterhouse on the acquisition of Vivarte from PAI Partners for a sum in excess of A3bn (£2bn), led by Paris-based international finance partner Laurent Mabilat.