Herbert Smith has officially confirmed to its employees that it is in merger talks with Australia's Freehills, issuing a note to all staff earlier this morning (3 February).

The note from senior partner Jonathan Scott (pictured) informs staff that an "interesting opportunity" has arisen in Australia, with the firm holding "exploratory talks" with Freehills about a possible link-up.

While stating that the talks may not lead to a deal, the note goes on to say: "You might have read some of the press speculation about this, and we are now in a position to confirm that we are in exploratory talks with their management team and discussing with our partners the merits of a possible merger with Freehills."

The internal announcement comes after Legal Week reported earlier this week that the proposed tie-up could go ahead as early as 1 July this year.

In addition to referencing the importance of Australia in terms of global trade flows and drawing attention to Freehills' strength in practices including disputes, corporate and energy, the note also sets out plans for expansion into Germany and the US. The openings are part of Herbert Smith's Blue Sky strategy review, which started last spring, with launches in Africa and South Korea also planned.

The New York launch is expected to go ahead this summer, with a German launch planned for early 2013. The termination terms of Herbert Smith's alliance with Germany's Gleiss Lutz and Benelux firm Stibbe mean the firm is not able to open in Germany before 2013.

In a press statement, the firm said: "We are in exploratory discussions with Freehills about a possible link-up. Talks are still very preliminary so it is too early to tell whether anything will come of this."