Wall Street investment bank Morgan Stanley will acquire E-Trade for $13 billion, the companies said on Thursday, the latest in a consolidation wave for the retail brokerage industry.
Morgan Stanley will pay $58.74 a share in stock for E-Trade.
Morgan Stanley shares fell more than 4% in premarket trading. E-Trade shares jumped 20% before they were halted.
Morgan Stanley will reportedly pay $58.74 a share in stock for E-Trade.
“E*TRADE represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy,” said James Gorman, Chairman, and CEO of Morgan Stanley, in a press release. “In addition, this continues the decade-long transition of our Firm to a more balance sheet light business mix, emphasizing more durable sources of revenue.”
The deal is expected to close in the fourth quarter of 2020.
The Morgan Stanley and E-trade deal follow the trend of consolidation in the online broker category. Last year, Charles Schwab announced it would buy TD Ameritrade in a $26 billion all-stock deal.
E-trade, with 5.2 million client accounts and over $360 billion of retail client assets, will be adding to Morgan Stanley’s 3 million client accounts and $2.7 trillion of client assets, the release said.
Morgan Stanley LONG (Buy)
ENTER AT: 56.74