Prolific dealmaker Silver joins Merrill Lynch

One of the City's most prolific dealmakers, Caroline Silver, has quit her role as vice chair of investment banking at Morgan Stanley to join rival American house, Merrill Lynch.

The move, which has stunned Morgan and will surprise the City, sees the banker who was instrumental in advising Euronext chief executive, Jean Francois Theodore, in his tie-up talks with the New York Stock Exchange (NYSE), join Merrill Lynch. Morgan Stanley confirmed last night that Silver had left last week.

Merrill, which is now headed by the former NYSE chief, John Thain. Silver also advised Euronext in its 2004 attempts to buy the London Stock Exchange (LSE).

The 46 year-old Silver was the main banker in the team behind Aviva's ultimately unsuccessful £17bn attempt to buy rival insurer, Prudential in 2006, while she was also highly influential in defending German pharmaceuticals giant Schering against a hostile bid, lining up Bayer as a friendly purchaser.

Sources say that her arrival at Merrill Lynch is likely to see a shake-up amongst the companies the firm advises.

For example, Merrill Lynch already advises FTSE 100 insurer Standard Life which would compromise a renewal of any relationship with Aviva. City sources describe her as "probably the most active female banker in the City today. Silver's a tough negotiator and can be a tough adviser."

A grammar school girl from Berkshire, Silver studied English and Spanish at Durham University before beginning her career with the accountants PriceWaterhouse. She joined City investment house Morgan Grenfell in 1987 before arriving at Morgan Stanley in 1994 building up the bank's cross border practice to be one of the most formidable in Europe.

It is not known when Silver will take up her role at Merrill Lynch or what her title will be. Silver joins a Merrill Lynch investment banking unit in the throes of advising on a raft of high profile deals, including the recent £12bn rights issue mounted by Sir Fred Goodwin's Royal Bank of Scotland (RBS).

Silver is likely to make formidable team working alongside Matthew Greenburgh, vice-chairman of global investment banking and chairman of the financial institutions group at Merrill Lynch.

Greenburgh was the key player in putting together the RBS-led consortium that eventually bought Dutch bank, ABN Amro, for €71bn, outfoxing rival Barclays.

Greenburgh is also seen as the go-to-man for London Stock Exchange boss, Clara Furse, whom he advised on the exchange's successful rebuttal of America's Nasdaq, and the subsequent £1.2bn purchase of Borsa Italiana last year.