Trillion-dollar bankers

Big deals are rife in Europe and the corporate financiers are cashing in, says Dan Gledhill

Anglo-German relations are not the only ones strained by the battle for control of Mannesmann, the German telecoms group under attack by Vodafone. The dispute has cleft the Zaoui household down the middle. Brothers Michael and Yoel are aligned on either side: Yoel, works for Goldman Sachs, which is advising Vodafone, while the Morgan Stanley Dean Witter team retained by Mannesmann is led by Michael.

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.

Start your day with The Independent, sign up for daily news emails
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
Robert De Niro has walked off the set of Edge of Darkness
news The Godfather Part II actor has an estimated wealth of over $200m
Arts and Entertainment
Fearne Cotton is leaving Radio 1 after a decade
radio The popular DJ is leaving for 'family and new adventures'
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower