The sibling rivalry between the investment bankers, whose expertise could govern the success of Vodafone's bid, will be ferocious. This is hardly surprising given that the two banks have each advised on European deals worth a record $1 trillion (pounds 617bn) this year. With the opposition blown out of the water, the only target left is to beat the other. Simon Robey, co-head of global mer-gers and acquisitions at Morgan Stanley, says: "We keep an eye on market share, but as for that landmark, its significance is more as an indication of the buoyancy of the market."
This buoyancy is now most keenly felt in Europe, where a variety of industries are still seen as ripe for consolidation. In the third quarter, the value of European M&A transactions outstripped those in America for the first time. Probably the most lucrative tug-of-war for City financiers was this summer's fight for control of Telecom Italia. Olivetti, which saw off Deutsche Telekom, retained four banks that shared fees in excess of pounds 400m.
Little wonder, then, that Goldman Sachs is desperate to remain in the Vodafone camp as its bid for Mannesmann unfolds. The German firm contested that since Goldman worked on its recent acquisition of Orange, it should not be allowed to share potentially sensitive information with the new enemy. No doubt Morgan Stanley would have liked nothing better than for Goldman to be ex-cluded from the deal, since that would have catapulted it ahead of Goldman in this year's rankings. But on Thursday the High Court ruled otherwise. Now the battle for Mannesmann has a sub-plot with Goldman and Morgan Stanley head to head.
One corporate financier says: "Goldman Sachs and Morgan Stanley invested in Europe before anyone else. It has not always been easy and they would admit that at times they have considered closing down over here. But the US houses are now finding they have huge advantages."
"Expertise is more important than size," adds Mr Robey. "But there is a need for breadth. You must cover all sectors, be experts in all products. It is not about size for size's sake "
The result, the figures show, is that Goldman Sachs and Morgan Stanley - followed by Merrill Lynch and Credit Suisse First Boston - have pulled away from the pack. All four are anticipating another bumper year, thanks to the belated willingness of continental governments to countenance foreign ownership of their biggest corporates.
This "thundering herd" from the US has brought a relentless work ethic. Corporate financiers involved in cross-border European deals regularly spend their days hopping from city to city, oblivious to both clock and calendar. With the future of NatWest also to be decided in the next couple of months, plenty of investment bankers may not be home for Christmas.
It all seems to signal the demise of the domestic houses, whose longstanding relationships are under threat from the Yanks. But the figures suggest that indigenous houses still have a place, in the UK at least. Schroders, for example, was top of the domestic table until recently, and only a conflict of interest prevented it from advising Bank of Scotland on its bid for NatWest.
But conflicts of interest can work to the disadvantage of the US interlopers. So large is the scope of Goldman's business that some company directors are uneasy about confiding in an adviser who may subsequently work for a rival.
As with Schroders, reports of the demise of Warburg Dillon Reed appear to be exaggerated. In the doldrums a year ago after another change of ownership, it has been involved in the two largest deals this year.
More remarkable still is the achievement of Greenhill, which was set up by two former employees of Barings. Its 18-strong workforce has retained clients as notable as Cable & Wireless, Prudential and Whitbread. In its bid to trample everyone else underfoot, it would appear that the thundering herd still has plenty of ground to cover.Reuse content