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After banking, next in line for the takeover fever are automobiles, chemicals and pharmaceuticals. Who benefits most from this? One sector that surely is not suffering is the overseas branches of American investment banks, which have vaulted ahead of their European financial rivals in advising European companies on mergers and acquisitions. In 1998 Morgan Stanley ranked first as the leading financial adviser of completed transactions in Europe, followed by Goldman Sachs. Warburg Dillon Read, an adviser based in Britain, had held the top spot for the two previous years.
The other great winners are Europe's shareholders. As one analyst pointed out, no matter whether Olivetti or Telecom Italia's management prevails in their battle, Telecom's shareholders have already earned a nice premium. Europe's cosseted work force, on the other hand, has not yet fully come to grips with what those investment banking euphemisms like "synergies" and "restructuring" can mean. As their American union counterparts discovered a decade ago, mergers will make Europe's largest firms more efficient and competitive, but they will do so by shedding thousands of jobs. And in Europe, where unemployment levels are more than twice as high as in the U.S., that could give new intensity to the term hostile takeover.