London-based law firm Allen & Overy and New York's Shearman & Sterling plan to merge, they announced on Sunday, in a deal that would create one of the world's largest legal practices with combined global revenue of approximately $3.4 billion.

If approved by a vote of partners at both firms, the tie-up would be one of the largest law-firm mergers in recent years and result in a firm with around 3,900 lawyers across 49 offices worldwide.

Allen Overy Shearman Sterling, which will be called A&O Shearman for short, "will be the only global firm with U.S. law, English law and local law capabilities in equal measure," the two firms said in a joint statement.

They said the deal will give Allen & Overy greater access to the U.S. corporate client base of Shearman & Sterling, which in turn would benefit from A&O's global reach.

The planned merger comes just months after Shearman & Sterling abandoned talks over a tie-up with transatlantic firm Hogan Lovells.

Shearman & Sterling announced in February it was laying off attorneys and business professionals in the United States. It has also seen a number of partner-level departures in recent months across several U.S. and international locations.

Allen & Overy, which posted global revenues of $2.65 billion in 2021/22, is significantly larger than Shearman & Sterling, which generated about $1 billion, according to figures reported by The American Lawyer.

The proposed merger would create the third-largest integrated law firm in the world by gross revenue, the two firms said, with a $1 billion practice in the United States. The firms' joint statement gave no timeline for a partner vote on the deal.

Allen & Overy senior partner Wim Dejonghe said the tie-up "supercharges our ability to serve clients in the U.S. market, which has long been a strategic priority."

Adam Hakki, senior partner at Shearman & Sterling, said "merging with Allen & Overy will dramatically accelerate our ability to meet (clients') needs in an increasingly complex environment."