UK “magic circle” law firm Allen & Overy is planning a $3.4bn (£2.7bn) merger with New York’s Shearman & Sterling, in one of the biggest transatlantic legal deals in history. The merger, which is subject to a vote of partners at both firms, will create one of the world’s largest legal practices with combined revenues of $3.4bn and about 3,900 lawyers across 49 offices. The tie-up, which comes months after the 150-year-old Shearman abandoned merger talks with rival Hogan Lovells, marks the first combination between an elite London law firm and a US rival since Clifford Chance merged with Rogers & Wells in 2000. The merger is a big move for Allen & Overy’s long-held ambition to become a player in the US market, after a deal with the California law firm O’Melveny & Myers fell through four years ago when the two sides failed to agree a valuation. “[The deal] supercharges our ability to serve clients in the US market, which has long been a strategic priority,” said Wim Dejonghe, the senior partner at A&O. “Both firms have a history of excellence, and together we think A&O Shearman will be a firm unlike any other in the world.” Allen & Overy is the significantly larger partner, reporting revenues of £1.9bn and employing a total of 5,800 staff globally, while Shearman & Sterling has 1,350 staff and made revenues of $907m last year. In February, S&S announced it was laying off staff in the US, and it also saw the departure of a number of partners after the aborted talks with Hogan Lovells earlier this year. “Merging with Allen & Overy will dramatically accelerate our ability to meet [clients’] needs in an increasingly complex environment,” said Adam Hakki, senior partner at S&S. The proposed merger would create the third-largest integrated law firm in the world by gross revenues, with a $1bn practice in the US, the two companies said. “What excites me about this merger is the complementary cultures of our two firms,” Dejonghe said. “We have striking similarities across the board, and I believe we are going to be wonderful partners to one another on this journey.” Equity partners at Shearman took home $2.48m in average profits last year, compared with slightly less than $2m for partners at Allen & Overy. The deal is expected to be put to a vote of partners in both firms this summer with completion within a year.