A stellar 12 months working on some of the biggest deals of 2007 has sent Allen & Overy (A&O) surging 12 places to take the number three spot in a league table of advisers for global mergers and acquisitions (M&A).

The UK-headquartered law firm advised on 344 M&A deals worth a combined $435 billion (£220 billion) last year, according to Bloomberg data. In 2006 it was ranked in 15th place by value of deals.

Leading deals that helped A&O to climb up the rankings include advising ABN Amro on its $100 billion takeover by a Royal Bank of Scotland-led consortium and Reuters on its $17 billion acquisition by Thomson.

Alan Paul, a London-based A&O partner, said the firm had enjoyed a busy year worldwide but highlighted the US, where it advised OCI Cement on its $15 billion takeover by Lafarge.

New York-based corporate giant Sullivan & Cromwell retained first place in global M&A advisory for the fourth year in succession after working on 176 deals worth $586 billion.

Freshfields Bruckhaus Deringer, another UK-based firm, climbed seven notches to take second place with deals worth $516 billion.

Clifford Chance was the third UK firm to feature in Bloomberg’s global top five after securing fifth place with 464 deals worth $392 billion.

The value of announced global M&A, including private equity deals, hit $4 trillion in 2007 beating the previous record of $3.5 trillion in 2006, Bloomberg said.

Andreas Fabritius, global head of the corporate practice at Freshfields, said: “This has been a stand out year for the market. The first half of 2007 was extraordinary in terms of the number and size of transactions. After the credit crunch in August there was still a lot of action in the market and we stayed pretty busy through to the end of the year, although the size of the deals tended to reduce.”

Despite recent woes in global credit markets and gloomy economic forecasts, legal dealmakers are predicting another strong year for M&A in 2008.

“Private equity will be quieter in 2008 but we are expecting a lot of corporate work especially in the first half. Elsewhere, infrastructure and emerging markets deals should keep us busy,” Mr Paul said.

Mr Fabritius said: “It will be interesting to see how the market bears up, but we think that there will still be significant activity well into 2008, with the energy, commodities and infrastructure sectors seeing some changes, and corporate entities making strategic acquisitions and divestments.”

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