Linklaters and Addleshaw Goddard have taken the lead roles on the proposed merger of Yorkshire and Chelsea building societies.

Linklaters advised Yorkshire, with City corporate partner Stephen Blackshaw leading on corporate aspects while capital markets partner Richard Levy led on the capital exchange.

Financial services partner Adam Bennett, an experienced building society adviser, led the Addleshaws team advising Chelsea, alongside banking and finance partner Mark Thomas.

It is understood that Allen & Overy (A&O), Yorkshire's longstanding adviser, was unable to take a role due to commercial conflicts.

The merger, which is expected to go ahead by 1 April 2010 subject to regulatory and shareholder approval, will significantly strengthen Yorkshire's position as the second-largest building society in Britain, with the combined entity to have assets of £35bn and a total of 178 branches.

The combination will be called Yorkshire Building Society, with the Chelsea Building Society name retained and operated as a separate brand within the group and with Yorkshire's top management remaining at the helm.

The merger comes in response to significant losses by both societies in the financial downturn. Yorkshire announced a loss of £15m in the six months running up to 30 June this year, while Chelsea lost £19m in the same time period.

Previous advisers to Chelsea include Salans and A&O.

Addleshaws had advised on 13 of the latest building society mergers running up to Nationwide's takeover of Derbyshire and Cheshire building societies last year, where A&O advised Nationwide while Addleshaw acted for both targets.