Cleary Doubles Market Share in 2017 M&A Rankings

The annual Bloomberg rankings of law firms by M&A deal volume are out, and once again, there’s been a reshuffling in the top spots.

Skadden, which came in fourth last year, topped the 2017 Bloomberg ranking of law firms representing principals, with 261 deals worth a total of $430 billion. That represents a 17.5 percent market share. Coming in second was Simpson Thacher with 170 deals worth $263 billion.

But one of the most striking moves came from Cleary Gottlieb Steen & Hamilton, which doubled its market share to claim spot 3 with a slew of big-dollar deals. The firm advised principals on just 85 deals with a total value of $259 billion.  

“2017, from our perspective, was a year where a lot of companies did arguably their most important transactions in a long time, and that plays into our strength,” partner Ethan Klingsberg told Big Law Business.

One of the firm’s biggest deals was helping Essilor through its $53 billion merger with Luxottica.

Klingsberg said he expects a combination of low interest rates, the new federal tax law, and an influx of merger-hungry board members across big companies will all contribute to increased M&A activity in 2018.

He also expects Cleary to benefit from an increased emphasis on diligence, particularly around areas like cybersecurity and privacy.

“Cleary has heavily invested in a lot of these areas that are ancillary but at the same time really integral to M&A, and I think that’s paying off now,” he said.

Stephen Arcano, who leads Skadden’s New York M&A group, also said he expects M&A activity to remain high in 2018. “The strategic drivers for M&A remain in place,” he said.

Blockbuster deals of 2017 included CVS Health’s announcement to buy Aetna for $69 billion and Walt Disney Co.’s $66 billion bid for Twenty-First Century Fox. In 2018, German pharmaceutical giant Bayer is pursuing $66 billion takeover of Monsanto, pending regulatory approval.

The Bloomberg principals ranking only takes into account law firms that performed work for the corporations buying a target or selling to a buyer. It does not include transactions in which firms solely advised banks or investment firms facilitating those transactions.  

Of course, the year-to-year rankings of law firms provide a snapshot of their M&A performance and should be taken with a grain of salt. For example, some firms may have been quite busy in 2017 working on large deals that won’t be announced until this year, or they may have spent significant resources helping clients ward off a takeover. They could be billing significant hours on these matters, but it won’t get them on the league tables.  

Last year’s top three firms, Wachtell, Sullivan & Cromwell and Cravath, fell in the rankings, yet they all remain in the top 15.

Wachtell still worked on big deals in 2017, representing United Technologies in its $30 billion purchase of Rockwell Collins, Whole Foods in its $13.7 billion acquisition by Amazon, and Actelion in its $30 billion purchase by Johnson & Johnson. The firm declined statement on the record.

Sullivan & Cromwell partner Frank Aquila said the firm had a “great year” in 2017, conducting a significant amount of work for the Bayer-Monsanto merger.   

We’re extraordinarily engaged with that process to get that deal done in 2018,” said Aquila. “Obviously Bayer wasn’t going out and doing other transactions during that time.”

“When you’re number one in the league tables, you essentially have no place to go but down,” he said of the dip in the firm’s rank. “But we still had a strong presence in lots of the major transactions and you’ll see us in lots of the major transactions in this year as well.”

Like Klingsberg and Arcano, Aquila said he expects 2018 to be a good M&A year, particularly when it comes to cross-border transactions, for all of the top law firms.

“We’re looking at a very unique period globally where all of the major economies worldwide are in growth,” he said. “We’re already seeing the year get off to a quick start.”

A representative for Cravath could not be reached for comment.

Below is Bloomberg’s list of the top 20 law firms, by M&A deal volume, in 2017:

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