logo-loader
viewMorgan Stanley

Morgan Stanley set to buy discount brokerage E*Trade Financial in $13 billion deal

The move adds strength to the investment banker’s wealth management unit at a time when the discount brokerage sector is seeing increased pressure on its business model

Morgan Stanley -
Morgan Stanley will get E*Trade's over 5.2 million client accounts and $360 billion of retail client assets

Banker Morgan Stanley (NYSE:MS) made waves on Thursday after it announced plans to acquire discount brokerage E*Trade Financial Corp (NASDAQ:ETFC) in an all-stock takeover worth $13 billion.

The move adds strength to the investment banker’s wealth management unit at a time when the discount brokerage sector is seeing increased pressure on its business model.

Shares of Morgan Stanley dipped in New York, down 3.3% at $54.46, while E-Trade’s shares soared 26.4% to reach $56.81 on Thursday morning.

READ: Charles Schwab and TD Ameritrade join forces in $26 billion all-stock deal

The acquisition is the largest by a Wall Street bank since the global financial crisis hit the street in 2008 and 2009. However, the deal is far from assured as regulators will be guaranteed to take a close look at whether the transaction violates antitrust laws.

If successful, Morgan Stanley will get E*Trade's over 5.2 million client accounts and $360 billion of retail client assets. E*Trade’s CEO Mike Pizzi is tapped to run the business post-merger, Reuters reported.

E*Trade shareholders will get 1.0432 Morgan Stanley shares for each share as part of the deal, which translates to $58.74 per share.

Analyst Keith Horowitz called the deal a “strategic fit” in a Thursday note, saying that Morgan Stanley’s stock is down as a reaction to the premium it is paying for E*Trade.

Morgan Stanley’s move comes after last year’s purchase of TD Ameritrade Holding Corp by rival Charles Schwab Corp for a massive $26 billion.

The E*Trade deal is set to close in the fourth quarter of 2020.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Quick facts: Morgan Stanley

Price: 34.01 USD

NYSE:MS
Market: NYSE
Market Cap: $52.12 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: CytoDyn's therapy used to treat New York coronavirus...

CytoDyn Inc (OTCMKTS:CYDY) CEO Nader Pourhassan tells Proactive the biotech shared positive test results today from seven coronavirus (COVID-19) patients who were treated with the company’s drug leronlimab at a leading medical center in the New York City area. Pourhassan, together diagnostics...

1 day, 5 hours ago

2 min read