Morgan Stanley has pushed into retail in the largest Wall Street acquisition since the GFC.
The purchase opens up a significant chunk of the retail market to the Wall Street giant, positioning them as a top player across financial advisory and workplace and self-directed finance. The combined platforms will have $3.1 trillion client assets, 8.2 million retail client relationships and accounts, and 4.6 million stock plan participants.
“E-TRADE represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy,” said Morgan Stanley chairman and CEO James Gorman.
“The combination adds an iconic brand in the direct-to-consumer channel to our leading adviser-driven model, while also creating a premier Workplace Wealth provider for corporations and their employees.”
Morgan Stanley will buy the online brokerage in an all-stock transaction valued at approximately $13 billion. E*TRADE stockholders will receive 1.0432 Morgan Stanley shares for each E*TRADE share, representing a per share consideration of $58.74 based on the closing price of Morgan Stanley common stock on 19 February 2020.
The acquisition will significantly increase the scale of Morgan Stanley’s retail business, accelerating its transition to a more balance sheet light business mix and opening up more durable sources of revenue.
The transaction is also expected to provide potential cost savings of $400 million from maximising efficiencies of technology infrastructure and optimising shared corporate services, as well as potential funding synergies of approximately $150 million.
“Since we created the digital brokerage category nearly 40 years ago, E*TRADE has consistently disrupted the status quo and delivered cutting-edge tools and services to investors, traders, and stock plan administrators,” said Mike Pizzi, chief executive of E*TRADE.
“By joining Morgan Stanley, we will be able to take our combined offering to the next level and deliver an even more comprehensive suite of wealth management capabilities. Bringing E*TRADE’s brand and offerings under the Morgan Stanley umbrella creates a truly exciting wealth management value proposition and enables our collective team to serve a far wider spectrum of clients.”
Chant West has fired legal action at previously agreed buyer and Zenith subsidiary CW Bidco in the NSW Supreme Court, after the company got...
Many active fund managers had already copped net negative flows before the coronavirus pandemic hit, with a report warning if markets contin...
The sale of a superannuation research hub has hit a bump, with the buyer signalling it wants out in the current market conditions. ...
Subscribe to our newsletter
Get notifications in real-time for staying up to date with content that matters to you.
