Morgan Stanley has announced it will buy Eaton Vance in a move it believes will deliver long-term financial benefits to shareholders and the company.
Morgan Stanley will acquire Eaton Vance for around $7 billion, bringing its assets under management to some $1.2 trillion with over $5 billion of combined revenues. The businesses are “highly complementary” with limited overlap in investment and distribution capabilities, and Morgan Stanley believes Eaton will fill product gaps and deliver “quality scale” to its investment management franchise.
“Eaton Vance is a perfect fit for Morgan Stanley,” said chairman James P. Gorman.
“This transaction further advances our strategic transformation by continuing to add more fee-based revenues to complement our world class investment banking and institutional securities franchise. With the addition of Eaton Vance, Morgan Stanley will oversee $4.4 trillion of client assets and AUM across its Wealth Management and Investment Management segments.”
Under the merger, Eaton Vance shareholders will receive $28.25 per cent share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of approximately $56.50 per share. Eaton shareholders will also receive a one-time special cash dividend of $4.25 per share.
“Over many years, Eaton Vance has delivered above-market growth by aligning our business with leading trends in asset management,” said Eaton CEO Thomas E. Faust Jr.
“By joining Morgan Stanley, we will be able to further accelerate our growth by building upon our common values and strengths, which are focused on our commitment to investment excellence, innovation and client service.”