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Morgan Stanley grows online brokerage with E-Trade deal

Morgan Stanley will buy the pioneering brokerage in a historic merger that will create one of the industry's most powerful online brokerages.

February 21, 2020

Morgan Stanley is buying E-Trade Financial Corp., a pioneer in the online brokerage space, for $13 billion in an all-stock deal.

E-Trade stockholders will get 1.0432 shares of Morgan Stanley for each E-Trade share, representing $58.74 a share, based on the closing price of Morgan Stanley shares from Feb. 19th. 

"E-Trade represents an extraordinary growth opportunity for our wealth management business and a leap forward for our wealth management strategy," James Gorman, chairman and CEO of Morgan Stanley, said in a press release. "The combination adds an iconic brand in the direct-to-consumer channel to our leading advisor-driven model, while also creating a premier workplace wealth provider for corporations and their employees."

E-Trade CEO Mike Pizzi will continue to run the company under the Morgan Stanley franchise and report to Gorman and will join the Morgan Stanley operating and management committees. One of E-Trade's independent directors will also join Morgan Stanley's board. 

"Since we created the digital brokerage category nearly 40 years ago, E-Trade has consistently disrupted the status quo and delivered cutting edge tools and services to investors, traders and stock plan administrators," Pizzi said in the release. "By joining Morgan Stanley, we will be able to take our combined offering to the next level and deliver an even more comprehensive suite of wealth management capabilities."

E-Trade has more than 5.2 million client accounts with more than $360 billion in retail assets, which adds to Morgan Stanley's 3 billion client relationships and $2.7 trillion in client assets.

Cover image: E-Trade