E*Trade surges 24% after Morgan Stanley announces it will acquire the online brokerage
. E*Trade shareholders will get $58.74 per share in stock, based on Morgan Stanley's Wednesday closing price. Shares of Morgan Stanley fell as much as 6% in early trading Thursday.
The combined platforms will have $3.1 trillion in assets and more than 8 million retail client relationships and accounts, according to a press release. Acquiring E*Trade will significantly increase the scale and breadth of Morgan Stanley's Wealth Management franchise, and position it as a leader in the industry across all channels and wealth segments, the bank said. The deal is expected to close in the fourth quarter of 2020.
"E*Trade's products, innovation in technology, and established brand will help position Morgan Stanley as a top player across all three channels: Financial Advisory, Self-Directed, and Workplace," said James Gorman, CEO of Morgan Stanley. He continued:"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."
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