It must be in the genes. Michael Zaoui is head of European mergers at Morgan Stanley Dean Witter. His younger brother by four years, Yoel Zaoui, is co-head of European mergers with Gordon Dyal at Goldman Sachs.

Not only do the Zaoui brothers have similar titles in the same business, they work for the top two firms advising European mergers. Last year Goldman Sachs was the number one merger adviser in Europe and Morgan Stanley was second. The previous year, the positions were reversed.

ichael has spent his career at Morgan Stanley. Yoel was offered a job by Morgan Stanley after he graduated from Stanford business school in 1988 but accepted one from Goldman Sachs instead. Goldman Sachs, Morgan Stanley and the Zaouis declined to comment for this article.

While the firms may find themselves on opposite sides of hostile transactions, the brothers have not. Neither worked day-to-day when Goldman Sachs's client, Vodafone AirTouch, made a hostile offer for Mannesmann, for which Morgan Stanley worked.

They have worked on the same transactions in the past, sometimes for the same client and sometimes on opposite sides of the table. The first transaction on which they worked together was for Credito Romagnolo (Rolo), an Italian bank facing a hostile bid from Credito Italiano (now Unicredito), in 1994.

Goldman Sachs and Morgan Stanley were hired to defend Rolo. Credito Italiano, after a year-long bidding war with an Italian consortium, bought Rolo for 88 per cent more than its initial offer.

At the time, Michael was quoted in this paper's Observer column saying he enjoyed the opportunity to "get closer" to Yoel.

A year later the brothers met up again. Yoel was part of Goldman Sachs's team working for Credit Agricole when it bought Banque Indosuez, the investment bank, from the Suez group for $2.26bn. Morgan Stanley, and Michael, worked for Suez.

Both brothers last year worked for Elf Aquitaine on its defence against rival Total Fina's hostile $58.8bn offer. They were part of the team that devised the first "PacMan" defence in France. For the second time, the brothers helped get more money for their client when Total raised its initial offer by 12 per cent.

The Zaouis saw each other earlier this year when HSBC, backed by Goldman Sachs, agreed to buy Credit Commerciale de France for $10.5bn. Morgan Stanley sold CCF to HSBC when ING, the Dutch bank, failed to make a firm offer for the bank after making initial overtures.

They often work on French or Italian transactions because they were born in Morocco, raised in Rome, and are French nationals. Their parents and middle brother, an entrepreneur, live in France. They and their families have taken holidays together in the south of France.

This year, though, as Goldman and Morgan look set to remain on top of the M&A adviser rankings, the brothers appear to be too busy to plan any family holidays.

While they have not followed the same path, they have followed similar trails. They went to top, but different, schools in Paris. Michael then went to Harvard business school in 1983. His brother followed him to the US, but went to Stanford on the opposite coast. They even have similar families - one son and one daughter.


Evolution likely, not revolution


Morgan Stanley Dean Witter
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