A new legal superpower has been born in energy and shipping markets through the merger of Allen & Overy and Shearman & Sterling.

The London and New York-headquartered operations are coming together to create the “first fully integrated global elite law firm,” they said.

The two sides added that the new entity, Allen Overy Shearman Sterling (AO Shearman), will be the only global law firm with US, English and local law capabilities in equal measure.

It will comprise 3,900 lawyers, including 800 partners, across 49 offices, and $3.4bn in combined revenues.

The merger will accelerate the growth strategy of both firms, each with distinct market leadership and strong cultural compatibility, the companies said.

“This merger is driven by clients’ needs for a seamless global offering of the highest quality and depth to support them in navigating an increasingly complex legal, regulatory, and geopolitical environment,” they added.

Allen & Overy specialises in work involving FPSOs, LNG carriers, drillships, container vessels, chemical tankers, VLCCs and luxury cruise ships.

Shearman & Sterling is strong on shipping infrastructure, oil and gas and renewables.

It worked with London’s Watson Farley & Williams advising PointState Capital as it took a stake in Taylor Maritime Investments during the bulker company’s initial public offering in London in 2021.

The New York company will gain access to a dramatically expanded “rest of the world” offering, while London’s Allen & Overy will benefit from increased board-level recognition and expanded access to a corporate client base in the US.

‘Unique’ firm

Wim Dejonghe, senior partner at Allen & Overy, said: “This combination of two great firms is such an exciting step for us. Both firms have a history of excellence, and together we think A&O Shearman will be a firm unlike any other in the world.”

Adam Hakki, his counterpart at Shearman & Sterling, added: “Client need for global elite firms has never been greater. They are calling for integrated global legal solutions and advice: merging with Allen & Overy will dramatically accelerate our ability to meet their needs in an increasingly complex environment.”

This is one of the biggest transatlantic legal tie-ups in history.

It is subject to a vote of both firms’ partners and comes just months after the 150-year-old Shearman & Sterling abandoned merger talks with Hogan Lovells.

The deal represents the first merger between a so-called “magic circle” London firm and an American rival since Clifford Chance joined up with Rogers & Wells in 2000.

Allen & Overy failed to clinch a merger with Californian firm O’Melveny & Myers four years ago due to different valuation ideas.