We start today with one of the biggest transatlantic legal tie-ups in history.
The London law firm Allen & Overy is merging with New York’s Shearman & Sterling to form a practice with combined revenues of about $3.4bn.
The merger, which is subject to a vote of both firms’ partners, will create one of the largest law firms in the world by fee income and comes just months after 150-year-old Shearman abandoned merger talks with rival Hogan Lovells.
Allen Overy Shearman Sterling, as the newly combined firm is to be known, will employ nearly 4,000 lawyers spread across 49 offices.
The proposed deal represents the first merger between a London-based “magic circle” firm and an American rival since Clifford Chance joined up with Rogers & Wells in 2000.
The tie-up follows a tumultuous period for Shearman, which has lost a number of lawyers following the aborted talks with Hogan Lovells earlier this year and has been undergoing a difficult restructuring.
For Allen & Overy it represents a long sought after opportunity to enter the lucrative US legal market, which has proved difficult for London-based firms to crack.
The deal is expected to be put to partners in both firms before the summer, with the aim of reaching completion within six to 12 months.
Here’s what I’m watching today:
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US debt ceiling talks: President Joe Biden and House Speaker Kevin McCarthy resume face-to-face talks today over raising the debt ceiling as the default deadline looms. Catch up on Sunday’s talks here.
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JPMorgan Chase: The biggest bank in the US holds its investor day in New York. Read what chief executive Jamie Dimon plans to tell shareholders.
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Monetary policy: James Bullard, president of the St Louis branch of the Federal Reserve, Richmond Fed president Thomas Barkin and Atlanta Fed president Raphael Bostic are all scheduled to make public appearances today.
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Results: Zoom, the video conferencing company, reports first-quarter results.
Who will win the US-China tech war? Join FT and Nikkei Asia journalists for a subscriber-exclusive webinar on May 25 and put your questions to the panel.
Five more top stories
1. Developing story: Meta has been hit with a €1.2bn fine by the EU and ordered to suspend transfers of user data to the US. The record fine was imposed on the owner of Facebook, WhatsApp and Instagram for having a lack of appropriate safeguards when transferring data between the EU and the US. For updates on this developing story visit our live blog.
2. Joe Biden said he expected to see a “thaw” in US relations with Beijing in the coming weeks as he wrapped up the G7 summit in Japan. The US president underlined his government’s “one China” policy but said if Beijing acted unilaterally against Taiwan “there would be a response”, without saying whether that response would be military. Read more on the G7 which was ambushed by Ukrainian president Volodymyr Zelenskyy.
3. Greece’s centre-right premier Kyriakos Mitsotakis routed his main rivals in yesterday’s parliamentary election. With 95 per cent of the votes counted, the ruling New Democracy party secured nearly 41 per cent — a lead of more than 20 points over leftwing rival Syriza. Read more on the surprise result.
4. Profits at Goldman Sachs, Morgan Stanley and a clutch of other western banks in China fell sharply last year, figures published by the lenders and seen by the Financial Times show. The lacklustre performance marks a reversal from 2021 when banks were allowed by Beijing to take control of their local operations in China.
5. Exclusive: Credit Suisse staff are preparing to sue the Swiss financial regulator Finma over $400mn of bonuses that were cancelled following the government-orchestrated takeover by UBS, which wiped out the bank’s additional tier 1 bonds. Thousands of senior bankers have a portion of their bonuses linked to the securities.
The Big Read
A class of chemicals known as PFAS (per- and polyfluoroalkyl substances) is critical to the production of everything from smartphones to firefighters’ suits — but especially to microchips. However, these “forever chemicals” also have the potential for significant health and environmental impacts.
We’re also reading . . .
Chart of the day
US companies are rushing to borrow money in the bond market, bringing forward deals in case the country’s debt ceiling stand-off causes turmoil over the summer. Highly rated companies have issued bonds worth $112bn so far this month, according to data provider Dealogic, up from $46bn in May 2022 and more than triple the amount sold in April.
Take a break from the news
The one-time Democratic presidential candidate, Hillary Clinton, offered stark assessments on Russia’s invasion of Ukraine, US-China relations, and US president Joe Biden’s re-election prospects during an appearance at the FT Weekend Festival in Washington over the weekend.
Additional contributions by Tee Zhuo and Vita Dadoo Lomeli
2023-05-22 09:57:44