Under the terms of the agreement, E*TRADE stockholders will receive 1.0432 Morgan Stanley shares for each E*TRADE share, which represents per share consideration of $58.74 based on the closing price of Morgan Stanley common stock on February 19, 2020. Morgan Stanley said the combination will significantly increase the scale and breadth of its Wealth Management franchise.
E*TRADE has over 5.2 million client accounts with over $360 billion of retail client assets, adding to Morgan Stanley’s existing 3 million client relationships and $2.7 trillion of client assets. Morgan Stanley’s full-service, advisor-driven model coupled with E*TRADE’s direct-to-consumer and digital capabilities, will allow the combined business to offer products and services to support the full spectrum of wealth.
James Gorman, Chairman and CEO of Morgan Stanley said Mike Pizzi, CEO of E*TRADE, will join Morgan Stanley, continuing to run the E*TRADE business within the Morgan Stanley franchise and lead the ongoing integration effort. He will report to Gorman and will join the Morgan Stanley Operating and Management Committees.
The acquisition is subject to customary closing conditions, including regulatory approvals and approval by E*TRADE shareholders, and is expected to close in the fourth quarter of 2020.