Magic Circle law firm Allen & Overy and New York-based Shearman & Sterling are merging in one of the biggest tie-ups in the sector.

The combined firm, Allen Overy Shearman Sterling, will have revenue of $3.4bn and employ close to 4,000 lawyers across 49 offices.

It will be known as A&O Shearman for short and “will be the only global firm with US 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 US corporate client base of Shearman & Sterling, which in turn would benefit from A&O’s global reach. No timeline was given for a partner vote on the deal.

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

Allen & Overy is the larger of the two merger partners with global revenues of $2.65 billion in 2021/22, while Shearman & Sterling 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 US.

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.”