Morgan Stanley is understood to be close to sealing one of the largest European M&A deals of the year so far, advising on the sale of Northumbrian Water of the UK.

Banking sources expect the sale by Suez, the French energy and media group, to be worth between €3bn ($3.2bn) and €4bn. As the European M&A market remains subdued, with just a handful of deals worth more than €2bn announced this year, it is a boon for Morgan Stanley to pick up such a large mandate.