Simpson & Marwick merger signed as firm eyes 2016 Miami launch
After months of negotiations, Clyde & Co successfully secured a merger with Scottish firm Simpson & Marwick last month, following other London-based insurance players in establishing a presence in Scotland and adding £30m to the Global 100 firm’s top line.
The deal, which was 100% approved by both partnerships and went live on 1 October, sees 45-partner Simpson & Marwick’s five Scottish offices, plus three English offices in Newcastle, London and Leeds, add to Clyde’s 38-office international network to establish a £420m firm.
The firm is branded Clyde & Co on both sides of the border, consistent with Clydes’ pragmatic approach to firm names, having dispensed with the BLG tag soon after merging with City firm Barlow Lyde & Gilbert in 2011.
Simpson & Marwick’s offices in Leeds and Newcastle will remain open and, according to the Scottish firm’s managing partner Gordon Keyden, ‘will complement Clyde & Co’s regional offering’. Its London office, which only recently added a partner presence, will remain open until the lease expires next April.
Clydes senior partner James Burns said: ‘Simpson & Marwick is the go-to firm for many of our clients in Scotland and we’ve long held it in high regard. Not only does it firmly position us as the leading insurance sector firm on both sides of the border, but it benefits our clients across all our sectors by giving us a great platform to meet their legal needs in Scotland.’
While Clydes confirmed that advanced talks were ongoing between the firms in May, discussions began in earnest in January. Burns noted that because the deal involved separate jurisdictions, which added to the complexity, it was important to take the time to get it right.
‘With what is effectively a cross-border deal, things could not be tied up overnight,’ he said. ‘We needed to take the time to ensure that the partnerships of both firms were completely satisfied with the deal, which is why it was a unanimous vote on both sides.’
The merger continues a prolonged incursion by English firms north of the border in the last three years, including Pinsent Masons’ acquisition of McGrigors in 2012 and CMS Cameron McKenna’s acquisition of Dundas & Wilson in 2014. This latest move means Clydes joins English insurance players DAC Beachcroft, Shoosmiths, DWF, BLM and Kennedys in having offices in Scotland, many of which were achieved through the takeover of a Scottish firm.
‘We see this as an aspirational, ambitious merger with no defence elements to it whatsoever.’
Simon Konsta, Clyde & Co
The recent influx of English insurance-driven firms into Scotland has been largely in response to clear demand from heavyweight insurance clients to provide a one-stop shop either side of the border. Speaking to Legal Business over the summer, Harper Macleod chief executive Martin Darroch gave this assessment: ‘Large multinational insurers do not care if there are two legal markets in the UK – to them Scotland is a peripheral market on the edge of Europe. They have turned to the City firms and said they want a one-stop shop for the UK.’
However, Clydes’ global head of insurance Simon Konsta said this deal was the result of the firms interpreting what they felt was the best way to service their clients, rather than a response to demands that they offer a one-stop shop. During negotiations, around 15-20 leading clients were asked to approve the plans.
Simpson & Marwick had been positioning itself for a merger for some time, having initially had 18 months of merger discussions with English heavyweight insurance player Kennedys that ended at the end of 2013. However, both sides were keen to stress that the merger was not a rescue deal of an ailing Scottish firm, as has been the case with both Tods Murray and McClure Naismith during the past 12 months.
‘Both Clyde & Co and Simpson & Marwick see this as an aspirational, ambitious merger with no defence elements to it whatsoever,’ said Konsta.
‘This merger did not have to happen, but we’re delighted it did. These are two very strong, financially robust organisations that will prosper better together,’ added Keyden.
Clydes will not be taking on the entirety of the firm – five months ago a 12-strong family law team, led by partner Shaun George, left to join Brodies in a move Keyden described as ‘entirely amicable and completely consensual’.
The Scottish launch comes on the back of a flurry of new office openings for Clydes in little over a year, including Newport Beach, California (June 2014); Cape Town and Johannesburg (August 2014); its own office in Riyadh (September 2014); and Brisbane (October 2014). The international expansion will not end there, with the firm eyeing a launch in Miami next year, following in the footsteps of DAC Beachcroft, which opened an office in Florida led by former AIG associate general counsel Sascha Stullenberg in September. The importance of Miami as a gateway market to Latin American insurance and reinsurance markets has been heavily trailed and is an obvious location for Clydes to also lay down a base.
mark.mcateer@legalease.co.uk