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UK companies Glaxo Wellcome and SmithKline Beecham are planning a £100 billion merger (US$60 billion) which will create the world's biggest drugs manufacturer and the world's third largest company after General Electric and Royal Dutch/Shell. The news follows the rumours surrounding a possible merger between SmithKline Beecham and American Home Products, now abandoned. UK firm Slaughter and May and US firm Sullivan & Cromwell are representing Glaxo Wellcome. Slaughter & May's corporate partners Glen James, Michael Pescod and Robert Stern worked with competition partners Michael Nicholson, Laura Carstensen and tax partner Howard Nowlan on the deal. Sullivan & Cromwell partner Ben Stapleton worked on M&A issues out of the New York office, assisted by London partners William Plapinger (securities) and Robert Osgood (antitrust).

Eurotunnel has restructured its debt through a four-tranche bond issue, totalling £5 billion. The issue includes a £1 billion convertible bond, swapping debt for equity. It is over two years since the company declared a moritorium on interest payments. The deal, which was the largest ever private sector corporate workout, involved a syndicate of almost 200 banks. UK firm Linklaters is advising the four agent banks for the syndicate (NatWest, Credit Lyonnais, Midland and BNP) on English, French and US law. Rambaud Martel is acting as special French counsel to the banks. UK firm Herbert Smith advises Eurotunnel alongside Darrois Villey Maillot Brochier, the local counsel.

The UK's system of distinguishing levels of barristers should be disbanded, according to a report published by free market think-tank, the Adam Smith Institute. Its author, Peter Reeves, criticizes the system of Queen's Counsels (QCs or silks) as being costly and misleading. The radical proposal follows recent criticism made by the Lord Chancellor, Lord Irvine, about top commercial barristers charging excessive fees.

UK firm Linklaters & Paines is extending its Asian practice by opening an office in Bangkok. The office, which opened in January, complements Linklaters' other Asian offices in Singapore, Tokyo and Hong Kong. Unlike other countries in south-east Asia, Thai bar rules enable foreign firms to employ local lawyers. Three lawyers have been taken on as partners to join managing partner Chris King. They join Linklaters from Thai firm International Legal Counsellors.

For the second time, the Swedish Bar Association has forced Wahlin Adokatbyra to dismantle its links with big six firm KPMG. Wahlin, a firm created in 1997 as an associate law firm of the professional services giant, must abandon the cooperation agreements between the two firms or face being disbarred with immediate effect. Name partner Tryggve Wahlin says: "The Bar came to the conclusion that these agreements were not consistent with the independence of the professional lawyers in Sweden. I can accept that reason because I think that is important too, but I don't think our agreements were in conflict with it."

Hungarian lawyers are reacting furiously to accusations from foreign firms in the country that new proposals will restrict Hungary's legal market. Local lawyers claim instead that the proposals, which are expected to become law next week, will liberalize the market. They also claim that the reforms will enable foreign law firms to work in Hungary within the law–something they feel has not been the case so far.

US firm Steel Hector & Davis, based in Florida, is to form an association with Brazilian firm Moreira Lima & Royster. The move highlights foreign firms' growing interest in establishing a presence in Brazil. Moreira Lima has offices in São Paulo and Rio de Janeiro. Moreira Lima was created in late 1997 after two lawyers, Eduardo Moreira Lima and Michael Royster, left Brazilian firm Garcia & Keener Advogados. Joseph Pallot, partner at Steel Hector, says it provides his firm with an opportunity. "We had been looking at entering the Brazilian market since late 1996," he says. "Brazil is Florida's number one trading partner."

After an initial slow take-up, National Policy 53, easing international equity offerings into Canada, has become standard for large issues. New standards have been set by five issues in 1997. By Robert T Stuart of Osler, Hoskin & Harcourt, London

Changes to financial regulation in the UK bring into focus the challange of boundaries in the legal framework. By Andrew Marsh of Sidley & Austin, London

UK firm Freshfields and German firm Deringer Tessin Herrmann & Sedemund have formed an alliance which is expected to lead to a cross-border merger in around two year's time. The alliance was announced on January 26 1998 and the full merger is proposed for late 1999. The first phase of the alliance will begin in May, with the merger of the firms' operations in Germany. Freshfields' only office in Germany is Frankfurt. The Brussels and Moscow offices of each firm will also combine and operate as joint offices. These were the two cities outside Germany where Deringer had offices, in addition to its four German offices.